Bitcoin Bulls Steadfast As 4 Key Data points Buoy Prices
For weeks I have said that the crypto market is experiencing a bottoming process. Since the last edition of this newsletter analysis, investor risk-appetite increased and Bitcoin rose as high as $48,400.
Being contrarian and having no emotional connection when the market was in free fall in Q1 2022 was key. This is easier said than done, but if you were able to see what I saw, then you are reaping the rewards as we speak.
Let’s dig in.
Dear readers,
The purpose of this newsletter analysis is to provide context to current events and cryptocurrency markets. It is released every Monday and Wednesday. I am not perfect and this is not a science — nor is this newsletter a signals service. While I cannot promise perfection I do my best to be honest and transparent.
Thank you for reading.
Feel free to contact me with feedback on contact@chrisoncrypto.com.
4 Key On-chain Metrics Indicate Steadfast Bitcoin Strength
Bitcoin has settled above the $46,000 mark, with four key data points indicating underlying strength and staying power for the foreseeable future at current levels.
Read the full article here!
Technically speaking
Bitcoin Closes a Strong Weekly Candle
Bitcoin/Dollar exchanges hands at $46,000, down 2% week-on-week at the time of writing. The pair closed a weekly candle at $46,350 on Sunday as the market experiences rounds of profit taking.
BTC/USD broke out of the consolidation structure and currently exchanges hands above the 200-daily EMA, below the $47,000 volume-profile shelf mentioned in the telegram channel.
Provided weekly support holds ($45,000), the technical breakout target for the consolidation structure is $54,000. However, all targets should be treated more so as regions rather than fixed levels.
Locally, BTC/USD is consolidating and should be considered within the context of the bullish daily breakout. As such, a retest of the H4 200-EMA is not outside the realm of possibility.
Beyond that, closing an H4 candle above the range VPVR shelf ($47,000) would open the door for continuation to the technical breakout target, tapping noteworthy liquidity pockets along the way.
The squiggly line(s) is not a prophecy, but merely a potential scenario which draws on previous market behaviour. The 200 exponential moving average tends to be consequential (pivotal) more often than not, especially on medium and higher time-frames after a breakout from a consolidation structure. Successful retests tend to inform market behaviour and set expectations for the new trend.
Provided there are no weekly closes below $45,000, the market is bullish until proven otherwise. However, should prices fall and close below $43,350 on the daily time-frame, the next area of interest is $36,600.
That said, as I write this there are strong arguments for short term strength. The technical picture tends to bring traders and short term investors on board, but more broadly, the on-chain data is also unambiguously bullish. From a sentiment perspective, the market has reacted well to Jerome Powell’s rate hike. And despite the positive turn of events, bears seem unable to recognise the changed situation as they remain emotionally attached to their bias.
The FOMC meeting provided a shift in risk appetite and bears remain in disbelief. No doubt, there are other macro catalysts ahead that must be considered within the context of price-action and other data points. The US consumer price data (CPI) data for March being one such event. In all likelihood, the data will reinforce calls for tighter monetary policy as it registers one of the largest inflation figures in history (fuelled by the Russia-Ukraine conflict).
Tightening monetary policy would not benefit risk-assets generally, but any rate hike won’t happen until the next FOMC meeting in May and might even be within expectations by then.
When it comes to Bitcoin/Dollar, ebbs and flows will continue to manifest, but bulls are programmed to win over a long enough timeframe.
p.s. This is my opinion. It is not financial advice.
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Christopher Attard
Founder of Chris on Crypto
Contributor to www.cityam.com
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Originally published at https://mailchi.mp.
