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. Another wild week in the Cryptosphere, and given the previous nine months, no one is surprised. BNB is the story of the week as they are making a splash with news directly related to the ongoing FTX Scandal. BNB is down 12%, ETH is down 6%, and BTC is only down 2%. This is why we see the Dominance of Bitcoin finally breaking the 42% barrier. We’ll get into more detail in the Dominance section.
Bitcoin Monthly - Long-Term
Unfortunately, there is nothing that will make the Monthly chart look good until we have secured a close above June’s High. The breaking of the June Low last month was a pivotal moment for investors to ride the sideline and wait for a defined correction to take place. December remains above the November low but there is plenty of fear on the streets that holiday trading with thinner books and the ongoing Binance FUD will lead to a breaking point on the low side.
Bitcoin Weekly - Mid-Term
Of our three potential retest areas for Bitcoin, before further downside is expected, two of them were tested, or at least close enough on a Weekly scale to consider tested. The larger structure retest at $18,764 was cut short at $18,385 but the June Low of $17,567 was tested and held its current position of resistance. This looks to be bad news for the Bulls as they have tried and failed in what could have been a pivotal moment to reclaim the 2017 ATH and flip $20K to support. This early rejection is not surprising due to the confluence of the rejection point also being the retest of a triangular pattern. The next area of support for Bitcoin is $13,868, which is the 2019 Swing-Fail from $20K.
Bitcoin Daily - Short-Term
Bitcoin Daily is showing some inconsistent price action, but one that needs to be addressed specifically is the invalidation of the Downtrend. Unfortunately, with trends, both local and macro, they need to be adjusted from time to time. What constitutes a true reversal or shift in price to warrant a higher low or a lower high can sometimes be subjective. In the example from last week, the section in orange was considered enough of a reversal to be included in the trend count and with the action last Wednesday, we indeed have an invalidation of the local trend.
This invalidation has an exploration date on it. So long as the price remains above the low of the trend on this current drop, the invalidation is confirmed and the price is expected to form a local uptrend as we see in the channel. This means that price will need to exceed the high posted a few days ago. If, however, the price breaks below the low marked at “8”, the downtrend is resumed and the action near “6” and “7” will get absorbed. This means that “8” becomes “6” and the new local high on Wednesday becomes “7” or the “true” Lower-High.
High-Side target break = $18,385
Low-Side target break = $15,460
Daily Bitcoin Volume
The Week over Week downtrend has come to an end but that hasn’t stopped the 30-day average to break below our lower trendline. However, just seeing the trendline stable and horizontal is better than increasing volume in a sell situation or decreasing volume in a buy situation. We all know we are still in a Bear Market and when the sellers are finally completely exhausted and they simply don’t have anything left to sell, that is the time we should see volume and price increase in tandem.
Since the beginning of August, Bitcoin Dominance has struggled with the infamous 42% level. Let’s preface this with; we are not out of the woods just yet…
Dominance has breached the 42% barrier and actually closed up the zone for the first time in a very long time. Part of this is due to the fact that while Bitcoin only lost 2% over the week, huge players that carry significant market shares dropped 6% and 12%, Ethereum and BNB, respectively. If Bitcoin were to lose the same percentage, we would be nowhere near 42%.
What we look for now is stability. We want to see significant trading through the week with a continued effort to keep Bitcoin above 42%. This means that if we see a recovery in ETH and BNB than we would need to see an equal move to the high side from Bitcoin. Unfortunately, the rest of the TA does not exactly line up with this thought.
Bitcoin CME Futures
Our $17,780 Upper Gap was indeed filled over the last week. This was one option that was discussed last week. As you can see, it wasn’t long after it was filled that the price retreated. Outside of the $5 weekly gap leftover from earlier price action, we have an Upper and a Lower Gap on the horizon. If the BNB FUD gets really noisy, $11K looks much better. It is hard to come up with any sort of Catalyst to breach $20K in the near term, but stranger things have happened in this market, and you cannot rule out ongoing manipulation.
As mentioned earlier, we are in an odd zone for price action. The Weekly shows a clear and noncontested path to $13K, but the Daily shows potential life for a short or mid-term reversal. However, what plagues the Daily is the reversal or potential reversal trend we were seeing was confined to a very promising channel that has now been obliterated. This makes re-entry into the channel very difficult.
The Bulls have to be thinking about other areas to deploy capital at this point, and the safest place for that is below the current action. The state of the overall market at the moment is salty, to say the least. There are too many politics involved with the FTX case already, and the second you introduce that wildcard into the scenario, things become much harder to predict as logic, fairness, and justice haven’t prevailed in modern politics for more than a few fleeting seconds at a time.
The Fed, another thorn in the side of every living human, refuses to be clear about the exact direction they are heading. Between CPI numbers and FOMC meetings, all we really know is that the people in positions to make changes aren’t qualified to be in those positions to begin with. So, what happens next? Great Question.
The recent attacks on Binance warrant a conversation to say the least. Cracking open a book and showing the context inside takes all but a few seconds, yet, the most powerful Exchange in Crypto can’t seem to find that time. The wondering leads to speculation. The delay leads to confusion. Confusion leads to hatred, and the emotions all result in more selling. I, for one would simply like everyone exposed for all their criminal acts, yes, including every politician who ever took an oath to serve the American people. However, that is fantasy, and we, unfortunately, do not live in the Matrix, or at least we are not fully aware we are.
What we can say is that Fear, Uncertainty, and Doubt lead to Selling. Something we have seen for 13 months and something we will likely continue to see until those emotions subside and there is a true catalyst to Buy once again.
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