Weekly Recap – 09-25-22

Top 5 by MCAP

Although this recap is mostly all about Bitcoin, it’s still important to discuss the overall health of the Top 5 as numbers 2-5 do have sway in the altcoin world.  Three of the five Top-5 coins by Market Cap are heavy to the downside. We can add BNB to the list of heavy downtrends on the larger timeframes. XRP is the odd man out in this situation as it’s really not looking all too bad, all things considered. Regardless of the Top-5, the Global Market Cap is below $1T again and that is not a great overall sign of good health.

Bitcoin Monthly - Long-Term

Long-Term Monthly we added a few trendlines to the mix as well as some areas of support. The one thing about a Bear Market is that it tends to get everyone feeling down and the Bulls need a bit of hope before they enter the dark days of despair. So, here is your hope. The previous breakout from a very short downtrend was after the third touch happened on the major downtrend line. We have recently had the third touch of our current downtrend line and we also have a similar type of support zone. Or course, that is about as far as that analysis goes. All eyes will be on Bitcoin when we do break the trend.

Bitcoin Weekly - Mid-Term

We don’t want to oversimplify it too much this is the Weekly Chart, and until we are trading over the overhead downward sloping resistance trendline, we remain in a Bear Market. It’s that simple. We have been consolidating on the 2017 ATH Zone since Mid-June, after the $14K – -44% two-week sell-off. This is a very important zone for the Bulls to defend, but the story so far sounds like the Bears have plenty more to go, and the Bulls are getting increasingly tired and less likely to come out as champions. The Weekly helps to clarify any mysteries of the Daily as the levels are very simple and easy to see without so much of the back and forth and sideways volatility.

Bitcoin Daily - Short-Term

For those of you who have been paying attention to this article, you will remember two significant things:

1: If we trade above the major trendline, then we can start to look for a potential reversal in the overall market

2: We previously have seen a triple denial on the trend result in the 4th attempt as a breakout play

IF, and it’s a BIG IF, but if we are to maintain our recent low and come back to test the previous high, that previous high would have to put price action ABOVE the trendline. Of course, this is a lot to ask of price action as things have been heavily focused on the downside pressure. We have a ton of resistance to push through in order even to reach the trendline again, let alone break it and then push above the recent high at $22,800.

Daily Bitcoin Volume

Volume has taken a reasonably sharp decline recently, but we are still trending up on the local chart. Again, volume trending or increasing while the price continues to drop is not a good thing; instead, it becomes an accelerant for more selling. Luckily, when we take a step back from the charts, we are more sideways than anything as we continue to dance around the $20K zone.

Bitcoin Dominance

Bitcoin Dominance continues to respect its very historical Support Zone as well as its almost equally historical Resistance Zone. This pullback from resistance was expected and the bounce off of support was anticipated. Now we have a double rejection to the high side resistance and we are headed to the support level again. The added assurance that the Bulls can’t break overhead resistance begins to tell a compelling story that this will be the time that support does not hold.

Bitcoin CME Futures

The Bitcoin CME Futures took another stab at filling the first of the two major gaps last week, but they were unsuccessful in completely filling the first gap. Although not much remains, it makes little to no difference as there is another major gap directly below the current one. If they are going to fill this zone, they may pull out all the stops and completely crash the market just to get it over with in one gigantic panic sell candle. This is only mentioned as they have done similar in the past. 


The picture above represents the many steps we took during the rally and the larger, chunkier steps we have taken back down. The reason why this is back to a downtrend is because the local rally became invalidated recently when we breached the lower low (Red 2). Once this happened, the potential for a corrective uptrend came to a close, and the local downtrend took over with a different set of coordinates.

Now, our next major support resides all the way down between $10.5 and $11.3K. This may seem unrealistic, but it’s only a 45% drop from the local area, and if you remember from earlier in this article, it was a 44% drop over the course of two weeks that got us into this 2017 ATH Support Zone in the first place.

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