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. As one week ends, another begins. Here we can see that both Bitcoin and Ethereum have been riding a very short-term push to the high side. Unfortunately, as we go through the charts together, we will see that very well may not be the case. BNB is still trying to hold on to a rally as well as DOGE, who has had some very interesting price action throughout the last few months. DOGE is still up 11% over the rolling 30-day period, and that is 11% more than we can say about any of the other Top-5.
Bitcoin Monthly - Long-Term
Bitcoin remains above the November low, which is a great start for 10 complete days of trading into the month. The Daily price action leaves a ton to be desired and more points get awarded to the prevailing trend every day. From the monthly perspective, we remain on the bottom end of the 2017 $20K ATH support zone. With monthly charts, you are never looking for an absolute level but rather a range and in the case of Bitcoin, it’s a huge range. The damage was really done in November and that is the precursor for some larger institutions to sit on the sidelines until Bitcoin reverses.
Bitcoin Weekly - Mid-Term
This past week closed with a Weekly Candle posting a $15.75 Loss from its Open a week earlier. That is $15.75 for 7 full days of trading, 24 hours a day. That is 168 hours of trading. That comes to less than $0.01 of change for every hour in the week. Of course, this is not how trading works, but it’s interesting nonetheless. Bitcoin has left us with an almost perfect Doji. We saw a peak gain of $315 and we saw a peak loss of $429 and in the end, we closed only 0.09% below the open of the week.
This is the period of trading when investors say the price has reached equilibrium. The “Buyers” and the “Sellers” agree that the FMV (Fair Market Value) is indeed what it is. Dojis are strange because they are not an indicator that is either Bullish or Bearish, instead, they are neutral. They serve as a pause in price action and they allow both sides to walk away and formulate a new strategy. Consider it a truce on the battlefield while each side collects their dead.
Bitcoin Daily - Short-Term
The Daily is opening this week with a Win for the Bears. Whenever the price is in a channel, it’s far for it to ride both Support and Resistance for some amount of time. When the Bears rejected the Bulls after their second touch on the high side, they didn’t just hold them from the next touch. They created an imaginary line horizontally in the sand and told the Bulls to stop trying. It has worked.
However, the Bulls protected the lower support from getting touched right away, which is always the plan. Instead, the Bulls propped up the price action and prevented the Bears from a victory for seven days. The only issue with that is that the Bulls are exhausted, and the Bears are riding high from a huge victory. Now we can see the Bears slipping price out of the channel. A successful move here would make traders take even more short positions.
Daily Bitcoin Volume
In more sad Bitcoin news, the Volume has been dying off terrifically. Last week we mentioned the trend of slipping volume, and last week played right into the hands of the trend. Average volume has slipped below both trendlines, and we have just confirmed the 5th week in a row of lower highs regarding volume per day. A decline in volume during a downtrend is a good sign, as it tends to mean. Sellers are getting exhausted from Selling.
At this point, Dominance is trying to establish permanent residence between 40% Support and 42% Resistance. Support has been holding up better than most ever expected and Dominace is struggling to even attempt another crack at breaking through 42. While the price action is low across the entire market, it is no surprise that we see very little movement as of late. When volatility returns and we have some trend-setting assets, this is sure to help guide the way.
Bitcoin CME Futures
No one wants to hear it, but I’m going to say it once again anyway. The next major Lower Gap sits at $11,110. That’s pretty low. It’s not out of reach, but it’s low. That is less than 85% down from the new ATH at $69K. To be clear, the 2017-2018 Bear Market was an 84.27% drop from $20K – $3100. This is important so that you understand just how crippling the market has the potential to get. We still have two local Upper Gaps as well, and there is still a chance we see those get filled before any attempt to the Lower Gap, but resistance has held so far, and the trend is not with the Bulls. There are even more Lower and Upper Gaps, but these are the ones to focus on for now.
Short-term is currently headed towards more downside. The reason for this is the current collapse of the channel. We should have seen protection on the support level and a push closer to the median. Instead, we are seeing a slow bleed out from support and currently trading below the channel. We need the market to actually wake up to have a better idea of price action as in a few hours we could see price action back in the channel and on the way to test resistance once again.
If we are to consider the downside route than we should consider the next three potential areas of either a bounce or support. They are:
Each of these levels represents the low from the local trend working its way up. It may not be the strongest trend but it may provide enough support to fend off the opposition.
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