In this issue:
- Bitcoin analysis
- Confluent charts
- Latest happenings
- Listening material
Bitcoin is offering an abnormally clear technical picture on MTF so we’ll keep this write-up short and sweet.
Following a bullish green weekly close on Sunday, BTC/USD retreated to the origin of the impulsive move, creating Monday’s low at $19,150. Weekend price-action almost fully-retraced — nothing we haven’t seen before.
Prices have broken through the long-term trendline where BTC/USD is currently consolidating. However, key liquidity around $19,000 (also weekend price-action) has yet to be tapped.
Keeping in mind the overarching context of a bullish weekly close and expectations of higher prices (partly due to legacy market confluence), it’s likely that the high for the week is not in yet.
Zooming out to the daily, a bull squeeze into local supply above $20,500 could be faded. And indeed, in a choppy environment such as this, the possibility of a full retracement back to $18,300 should be on the table. This would give bears the time to close positions and flip bias due to the structurally changed chart (i.e. not bearish).
The question is: would bitcoin be that forgiving?
Consolidation around $21,800 — $22,000 opens the door to another leg up towards the 200-daily moving average. Price will have traversed the entire range in this scenario. A higher-timeframe breakout to $35,000 could require a retest of support ($22k) on a weekly basis.
As noted in last week’s newsletter, Bitcoin is trading within the value area in terms of a longer-term time horizon. Key traditional market indices and tickers also suggest a generalised mid-term rally is worth considering.
In my view, Bitcoin will ultimately decouple from stocks, but seeing as there’s a strong contingent of people who are on-board with the stonk-crypto correlation it cannot go unnoticed.
The Dollar index has so far rejected after two attempts to break resistance (113.2). A weakening dollar is good for asset prices and with legacy market turmoil in the bond markets (US Treasuries, Pound, Yen), headwinds for DXY upside are compounding. The Fed has also indicated that it will pivot to a 0.5% rate hike in December (as opposed to 0.75%).
The SPX remains in an undeniably bullish posture, printing a positive divergence on both the weekly and daily time-frame. ES mini-futures reclaimed the 200-weekly EMA after 4 consecutive weeks of failing to see downward expansion.
Gold has not reclaimed its range ($1,700-$2,000). Its relative stagnation may pause the central-bank disillusionment narrative, but with the UK’s newly appointed CBDC-loving PM Rishi Sunak, I’m certain there will be ample reasons for compounding elite hatred in the not-too-distant future.
LEO/BTC has changed structurally since the start of the bear market. This change is another indication that Bitcoin has witnessed a macro bottom. Price is held up by the 200-daily EMA and could meander around these levels. A drop to 0.00015 Sats would likely be accompanied with a BTC/USD melt-up.
The VIX (volatility index) rejection has room for downward expansion too — another 20%, potentially, before bouncing. Notably, Bitcoin’s volatility index (BVOL) is at historical lows. Typically this is indicates that a violent move is imminent.
Bears are exhausted. This is the longest consolidation in the history of the cryptocurrency. Something has to give, and while anything can happen, the Northbound trajectory is most compelling.
- Binance Crypto Volume Share Surpasses 50% in 24 Hours.European Regulators Set to Dish Out Energy Efficiency Labels for Blockchains.
- The Litecoin Network Turns 11 Years Old With The Longest Running Uptime In All Of Crypto.
- BNY Mellon Client Demand Hits ‘tipping point’ for Bank’s Crypto services.
- Cathie Wood of Ark Invest discusses disruptive technologies, Bitcoin, deflationary signals and uncertainty in Fed’ decision-making with Peter McCormak.
The purpose of this newsletter analysis is to provide context to current events and cryptocurrency markets. It is released every Tuesday. I am not perfect and this is not a science — nor is this newsletter a signals service or financial advice. While I cannot promise perfection I do my best to be honest and transparent.
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