In the previous article on Bitcoin, we discussed the possibility of another fake breakout above the resistance at $26,800. We stated that we expected the rally to be bought by retail, which seems to be confirmed by the latest data from LookIntoBitcoin, showing the number of small Bitcoin addresses (with balances below 100 BTC) increasing and the number of large addresses (with balances exceeding 1,000 BTC) falling (in the past few days). To keep the bearish thesis alive (about BTCUSD dropping to $24,000), we want to see Bitcoin fail in breaking above the resistance near $27,500. In addition, we want to see RSI, Stochastic, and MACD start flattening on the daily time frame and eventually start pointing to the downside. Furthermore, we want to see the number of large Bitcoin addresses trending flat or down, suggesting whales are still not buying (at least outside the futures market).
To reevaluate our view, we want to see Bitcoin march higher, breaking above $27,500 and then $28,142 (accompanied by the growth in the number of large Bitcoin addresses). On top of that, we want to see all mentioned technical indicators continue rising on the daily time frame, with MACD fully breaking above zero (and holding ground above this level).
Now, to move on to a different topic, what caught our attention in the past few days is that the recent jump in the price of Bitcoin was once again accompanied by news about Bitcoin Spot ETF (in reference to Gary Gensler’s testimony in front of U.S. Congress) and the government shutdown in the USA. Interestingly, a similar uptick occurred among many altcoins (while Bitcoin’s dominance decreased and USD strengthened). In fact, we would say that the USD has been behaving unusually strongly recently, similar to how it behaved during last year’s stock and cryptocurrency market selloff. That is raising our suspicion, and we think that we might be seeing merely a deceitful move higher (in altcoins), intended to suck in retail and create exit liquidity for big players who seek to cash out altcoins into Bitcoin and Bitcoin into fiat money. As a result, we are on high alert.
Illustration 1.01
Illustration 1.01 shows the daily chart of MACD. The yellow arrow highlights MACD’s attempt to enter a bullish area above the midpoint; if successful, it will be slightly bullish in the short term.
Technical analysis gauge
Daily time frame = Slightly bullish
Weekly time frame = Bearish
*The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of RSI, MACD, Stochastic, DM+-, ADX, and moving averages.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
To reevaluate our view, we want to see Bitcoin march higher, breaking above $27,500 and then $28,142 (accompanied by the growth in the number of large Bitcoin addresses). On top of that, we want to see all mentioned technical indicators continue rising on the daily time frame, with MACD fully breaking above zero (and holding ground above this level).
Now, to move on to a different topic, what caught our attention in the past few days is that the recent jump in the price of Bitcoin was once again accompanied by news about Bitcoin Spot ETF (in reference to Gary Gensler’s testimony in front of U.S. Congress) and the government shutdown in the USA. Interestingly, a similar uptick occurred among many altcoins (while Bitcoin’s dominance decreased and USD strengthened). In fact, we would say that the USD has been behaving unusually strongly recently, similar to how it behaved during last year’s stock and cryptocurrency market selloff. That is raising our suspicion, and we think that we might be seeing merely a deceitful move higher (in altcoins), intended to suck in retail and create exit liquidity for big players who seek to cash out altcoins into Bitcoin and Bitcoin into fiat money. As a result, we are on high alert.
Illustration 1.01
Illustration 1.01 shows the daily chart of MACD. The yellow arrow highlights MACD’s attempt to enter a bullish area above the midpoint; if successful, it will be slightly bullish in the short term.
Technical analysis gauge
Daily time frame = Slightly bullish
Weekly time frame = Bearish
*The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of RSI, MACD, Stochastic, DM+-, ADX, and moving averages.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
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We are paying close attention to Resistance 2; a failure of the price to stay above this level will ressurect bearish odds.
Illustration 1.02