The Crypto Comms #32
Bitcoin is searching for a bottom. It’s also on the verge of creating a high time-frame deviation, but nothing is set in stone in the game that never ends.
In this issue:
- Bitcoin analysis
- More charts
- Latest happenings
- Listening material
Bitcoin analysis
Bitcoin/Dollar ranged between $16,800 & $17,400 over the weekend. Price swept its way into local liquidity before rejecting and taking a swing at the other end. At the time of writing, BTC/USD exchanges hands at around $17,000.
In a range-bound scenario, deviations outside the range tend to traverse to the opposite end of the range. Gold’s long-term chart is a near-perfect example of this setup (see below). Bitcoin is arguably lagging.
Technically, weekend price-action was swept, creating the Monday high ($17,4k) and subsequent low ($16.8k). Weekend price-action tends to have low-volume, which means less money is necessary to move the market (resulting in less reliable price signals).
A sweep into liquidity below $16,800 would open up a possibility for BTC to reclaim the level on its way to higher time-frame targets ($18,300).
If strength materialises above $17,200, then there’s arguably enough gunpowder to reach higher regardless of whether a liquidity hunt lower takes place.
The question I’m most interested in is: does Bitcoin’s price go higher now, or later?
As noted last week, Relative Strength Index (RSI) reversal confluence on multiple time-frames (weekly & daily) is rare, and should be seriously considered.
The line in the sand for immediate upside momentum is the $16,400–500 level. If lost, it’s a hands-off approach until market structure matures further. That said, impulsive moves tend to create price inefficiencies in price-action, which in turn act as a target for market makers.
More charts
The Dollar Index reached a pivotal level (104) before it rebounded slightly after printing a positive divergence on the RSI. From a structural perspective, the DXY has likely peaked, but a reversion to 108 and potentially 114 is possible in the weeks ahead. A double top pattern would open the door for a multi-month bull market in crypto.
Gold is back within its 2-year range and may well begin to traverse to $2,000 in the weeks ahead provided $1,690 offers support. The US’ strategic petroleum reserves will empty in half a year at 2 million barrels per day released (mbpd), per Zoltan Pozsar’s analysis. These reserves will be refilled and Russia could be included either directly or indirectly (via India). A bullish market cycle for Gold is positive for ‘sound money’ assets in my view, though there may be a lag.
Latest happenings
- SBF Attempts to Stir Sympathies In Extraordinary NYT Interview.
- Back to Basics: Proof-of-Work is the Superior Consensus Mechanism.
Listening material
Dear readers,
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.
Thank you for reading.
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