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/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.
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.
- SBF Attempts to Stir Sympathies In Extraordinary NYT Interview.
- Back to Basics: Proof-of-Work is the Superior Consensus Mechanism.
- Luke Gromen: Can Congress force a Fed pivot; What financial repression methods could policymakers employ?
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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