Or is the market about to collapse further? Is there even enough liquidity to begin a bullish trend?
On the lefthand chart, you can see that since the lows of September 22nd, 2022, Bitcoin has been making higher lows. In doing so, an uptrend line can be drawn (light blue). This uptrend can also appear to some traders as an ascending triangle with a resistance around the $20.4-20.5k level, though ascending triangles usually do not have such strong sell volume.
This light blue uptrend, as it so happens, runs parallel to the uptrend broken in August after the rejection at $25k and the 100 day Moving Average (yellow). Since these uptrends run parallel, it is possible that they begin to form the bounds of a longer uptrend channel.
IF Bitcoin can get back into the uptrend on high volume today or tomorrow, I think it could be a sign that the bottom is in for the medium-term, meaning that it could be longer before the crypto market sees new lows. Perhaps I would then become a little more cautiously optimistic on price during that time period.
HOWEVER, as can be seen on the lefthand chart, it's possible Bitcoin is in the process of breaking down. The daily MACD looks ready to flip red, and there have been significant spikes in sell volume over the last week on Coinbase. This support has been difficult for sellers to break through despite these spikes, and I've noticed heavy bids at these levels, particularly on Binance. Nevertheless, I will only change my medium-term view with a higher volume bounce back above the $19500-19600 resistance from the current level. Perhaps even $20k to be safe, with a solid retest of $19600-19800 as support. This bounce will need to sustain, as it could carry Bitcoin all the way to the top of the channel - above $30k. Sure, from a fundamental reason it doesn't seem that markets are likely to rally, but they never fail to surprise. A move like this would make sense from a sentiment standpoint.
My concern here is that there is still plenty of leverage in the system, what with open interest at comparatively high levels, and real estate prices where they are despite exploding mortgage rates. So, even if we do see a larger bounce soon, I'm unsure if it would sustain longer than 3-6 months. A 6-month bounce trajectory is shown on the righthand chart for Bitcoin. Should the support give way here, I think that could spawn further disaster for crypto exchanges, leading to much lower prices (shown by the red arrows).
What is also concerning is the weekly chart, where the 9 EMA is being pulled below the 200 week MA. I wrote about the possibility for this in an analysis back in August:
Here is the current weekly chart:
This is a bearish technical development which has never happened for Bitcoin. Not to mention, Bitcoin sustains BELOW the 50 month MA (red). for the first time.
Looking at these charts, it is clear Bitcoin will need to close weekly and monthly candles above $23k AND $27k to even consider a broader reversal. But in the short term, I think there's a possibility here to begin an uptrend. There will just need to be cooperation from traditional markets, ideally.
On a somewhat positive note, the TOTAL crypto market cap has yet to produce these bearish developments. It is still maintaining the 200 week MA and the 50 month MA. The bearish cross has not yet occurred, but the market cap will need to break and hold the $935 Billion level (9 week EMA) to begin a broader uptrend.
However, this can also just tell us that the crypto market as a whole is simply waiting to break down once and for all.
In Summary
It could be a good long signal if Bitcoin can get back above that blue uptrend in the short term and maintain it on the daily/weekly timeframes. If it can't accomplish this, I think new lows (even sub- $10k) are decently likely, due to a number of bearish developments on the weekly and monthly charts, which will solidify if price continues to drop. If further decline occurs, the TOTAL crypto market cap chart will also begin to look incredibly bearish on longer timeframes, and the industry could be in big trouble. I heard that Crypto.com just laid off 40% of its staff. Yikes. And there's a stadium named after them. Double yikes. Regardless of what happens, this era in markets is surely one for the history books.
This is not meant as financial advice, but for speculation and entertainment only.
-Victor Cobra
On the lefthand chart, you can see that since the lows of September 22nd, 2022, Bitcoin has been making higher lows. In doing so, an uptrend line can be drawn (light blue). This uptrend can also appear to some traders as an ascending triangle with a resistance around the $20.4-20.5k level, though ascending triangles usually do not have such strong sell volume.
This light blue uptrend, as it so happens, runs parallel to the uptrend broken in August after the rejection at $25k and the 100 day Moving Average (yellow). Since these uptrends run parallel, it is possible that they begin to form the bounds of a longer uptrend channel.
IF Bitcoin can get back into the uptrend on high volume today or tomorrow, I think it could be a sign that the bottom is in for the medium-term, meaning that it could be longer before the crypto market sees new lows. Perhaps I would then become a little more cautiously optimistic on price during that time period.
HOWEVER, as can be seen on the lefthand chart, it's possible Bitcoin is in the process of breaking down. The daily MACD looks ready to flip red, and there have been significant spikes in sell volume over the last week on Coinbase. This support has been difficult for sellers to break through despite these spikes, and I've noticed heavy bids at these levels, particularly on Binance. Nevertheless, I will only change my medium-term view with a higher volume bounce back above the $19500-19600 resistance from the current level. Perhaps even $20k to be safe, with a solid retest of $19600-19800 as support. This bounce will need to sustain, as it could carry Bitcoin all the way to the top of the channel - above $30k. Sure, from a fundamental reason it doesn't seem that markets are likely to rally, but they never fail to surprise. A move like this would make sense from a sentiment standpoint.
My concern here is that there is still plenty of leverage in the system, what with open interest at comparatively high levels, and real estate prices where they are despite exploding mortgage rates. So, even if we do see a larger bounce soon, I'm unsure if it would sustain longer than 3-6 months. A 6-month bounce trajectory is shown on the righthand chart for Bitcoin. Should the support give way here, I think that could spawn further disaster for crypto exchanges, leading to much lower prices (shown by the red arrows).
What is also concerning is the weekly chart, where the 9 EMA is being pulled below the 200 week MA. I wrote about the possibility for this in an analysis back in August:
Here is the current weekly chart:
This is a bearish technical development which has never happened for Bitcoin. Not to mention, Bitcoin sustains BELOW the 50 month MA (red). for the first time.
Looking at these charts, it is clear Bitcoin will need to close weekly and monthly candles above $23k AND $27k to even consider a broader reversal. But in the short term, I think there's a possibility here to begin an uptrend. There will just need to be cooperation from traditional markets, ideally.
On a somewhat positive note, the TOTAL crypto market cap has yet to produce these bearish developments. It is still maintaining the 200 week MA and the 50 month MA. The bearish cross has not yet occurred, but the market cap will need to break and hold the $935 Billion level (9 week EMA) to begin a broader uptrend.
In Summary
It could be a good long signal if Bitcoin can get back above that blue uptrend in the short term and maintain it on the daily/weekly timeframes. If it can't accomplish this, I think new lows (even sub- $10k) are decently likely, due to a number of bearish developments on the weekly and monthly charts, which will solidify if price continues to drop. If further decline occurs, the TOTAL crypto market cap chart will also begin to look incredibly bearish on longer timeframes, and the industry could be in big trouble. I heard that Crypto.com just laid off 40% of its staff. Yikes. And there's a stadium named after them. Double yikes. Regardless of what happens, this era in markets is surely one for the history books.
This is not meant as financial advice, but for speculation and entertainment only.
-Victor Cobra
Comment:
Quick update: Not much has happened, but it appears now Bitcoin will ideally need to close a daily candle above $20.5-20.6kish to look bullish again in the medium term.
