Weekly Recap – 10-16-22
Top 5 by MCAP
This last week was filled with the biggest fears of crypto being dead forever to the hope that $100K is around the corner and all of that was inside one 24-hour period. Last Thursday, Bitcoin opened its daily candle at $19,153. The first 4 hours were relatively quiet, but Bitcoin went down about .5%. The next 4 hours brought a much larger move down that at one point was 2.26% or $429 down. However, there was a quick recovery, and Bitcoin was on the mend until the traditional stock market opened in America and really brought the pain. By this time, Bitcoin was down to $18,753, the lowest it’s been since late September, but Bitcoin would go on to lose another 3.32% or $622, bringing the value of one Bitcoin down to $18,131. We haven’t traded at that level since June 19th, 2022, which was two days after our $17,567 low. But… there is more.Â
Shortly after dropping to the low $18Ks, Bitcoin spent the next 12 hours with a peak gain of 10.06% or $1823 from the low and brought Bitcoin to a high which was only $46 shy of $20K. As you can see, traders’ emotions on Thursday were very high and very all over the place.
Bitcoin Monthly - Long-Term
We had a sell-off last Thursday that shook the market but only temporarily. Even with that sell-off and the drop near the low $18,000’s, we remain in the same Support zone since June. This means we are in month 5 of holding the same Support zone that is roughly created from the very same levels of the 2017 All-Time High near $20K. Unfortunately, in the past, we have seen these large zones hold for many months only to fail and drop 50% in value. The jury is still out on what will happen next for Bitcoin as next month we can pencil in a year-long downtrend since the recent Bitcoin ATH at $69K.
Bitcoin Weekly - Mid-Term
Daily remains more or less in the $20K range. Sideways range-bound is the best way to describe Bitcoins price action over the last few months. Yes, there are days of high volatility, but when you take a step back and look at the overall trading, there isn’t much to see. With the low last Thursday breaking the low from September 21st, we technically have the 6th piece to our local downtrend puzzle. This is utilizing the price action that was previously an uptrend before becoming invalidated.
Bitcoin Daily - Short-Term
As far as the Daily is concerned, Bitcoin is holding at the moment the local 618 Fib from the recent low at $34,017 and the recent High at $45,855. This local level unfortunately does not have much confluence a whole lot. Recent price action on the initial leg can be considered Horizontal Support but its a bit of a mess. It does line up decent with the 618 and we all know how much Bitcoin loves the 618.
The larger Daily trend is obviously down but we have nearly a month of what could be considered a potential reversal. We would like to see this upward action coupled with a lot of Volume but that is simply not the case. Â
The rejection on the bottom side of the previous Range is another feather in the cap for the Bears. A drop below $34K would likely mean we will see $32K without question.
Daily Bitcoin Volume
Volume continues to impress by staying on the path of the upper trend. We had a few really good above average days of both Buying and Selling and that includes other days besides just Thursday.Â
Bitcoin Dominance
The dominance continues to struggle at the 42% resistance zone. There was an attempt two weeks ago that failed and another attempt last week that also failed. The very local trend working its way to the resistance zone is, indeed, an uptrend, and the Dominance looks to be setting itself up for a third attempt and breakthrough this coming week. The question on everyone’s mind is this: Will the Alts get destroyed in order to help push Bitcoin Dominance upward, or will the entire market rise together with Bitcoin simply outpacing major alts…
Bitcoin CME Futures
We track Daily Gaps on the Bitcoin CME Futures chart because there is about a 95% or better chance that a gap will fill. When we created our recent Bitcoin low at $17,567, the CME Futures market was closed. June 18th was a Saturday. That area would have chipped into the next major gap to fill below us and fully filled the current gap we are looking at. Instead, CME was closed and waited 4 months for the prices to come back down just to fill this first of two Big Gaps. Our $19,080 – $18,020 gap is finally and officially filled. We can now set our targets to the lower gap of $17,575 – $16,925. If you don’t think it’s possible, just remember that 11 months ago, we were trading at $69K.
Conclusion
Wicks like the one left on Thursday tend to get filled by traders who missed the show either a week or two after the fact. There may be heavy concentration during regular market hours to actively sweep these lows once again. If that is the case, look for the hammer to finally fall and potentially get a massive move down with a relatively fast buyback. If all we do is maintain, then don’t expect too much over $20K unless the Bulls are really trying to make a statement. A move near $20,500 would mean the local downtrend has been invalidated and we can start to long for temporary or short-term opportunities long. Until then, we are sideways or down.
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