05/08/24 Weekly outlook
Updated
Last weeks high: $70,078.54
Last weeks low: $57,217.14
Midpoint: $63,647.84
Have we just witnessed capitulation after a week long slide in BITCOIN and crypto as a wholes price? -30% in 7 days, or is this part of a larger sell-off? Here are some of my thoughts:
- '21 ATH REJECTION - As I have said in many of my previous posts the '21 ATH @ $69,000 is a level that BTC just cannot seem to break. Since the beginning of this year BTC has printed an SFP (swing fail pattern) 6 TIMES! This outright refusal to break through clearly creates a problem and when LONGS have been exhausted trying to break through this impenetrable barrier, naturally price must retreat and start again from a point lower down, we are seeing that now.
- CARRY TRADE - The BOJ (Bank of Japan) has RAISED RATES from 0-0.1% to now 0.15-0.25% after the conclusion of its 2 day monetary policy review. This has not only cratered the NIKKEI 225 -13.5% (at time of writing) but that has also has a domino effect on other traditional stocks & indices. It may not seem like a big rate hike but the underlying meaning of the hike is the problem. With it comes a hawkish approach for the foreseeable and that has the rest of the world worried because it shuts the door to FREE CREDIT. When the Yen is free to borrow which it has been up until now it weakens JPY again USD, that free YEN is borrowed using assets as collateral and then used to invest into Real-Estate for example and yields more, keep the profit and pay back the JPY using USD which is gaining in strength, a two fold win. However, now that JPY isn't free to borrow and could potentially get more expensive to borrow in the future it means those people no longer have access to free credit and also the JPY is getting stronger against the USD. A two fold loss from what was a certain win. That has caused the panic and sell-off.
- GEOPOLITICAL LANDSCAPE - There is no denying the world is in a state of worry geopolitically. Lockheed Martin (LMT) is up 17% since July 1st and I don't think that is a coincidence when the the wider market, especially big tech is falling of a cliff.
When war is a possibility/ inevitability, risk assets struggle, this is only natural as investors play it safe and try to protect what they have. A growing selling pressure and a lack of buyers will cause a market to retreat every time.
This week I'm looking for BTC to form a new base for us to bounce from, with rate cuts coming from September onwards and a Weekly Bullish Orderblock filled this is a possible long term entry position in the making. Need to see some strength returning first but as the saying goes, buy when others are fearful and sell when they are greedy.
TL;DR
- '21 ATH SFP for the 6TH time this year, exhausted rally.
- JPY rate hike closing the door on carry trades, huge selling pressure.
- Geopolitical uncertainty, risk-off environment.
Last weeks low: $57,217.14
Midpoint: $63,647.84
Have we just witnessed capitulation after a week long slide in BITCOIN and crypto as a wholes price? -30% in 7 days, or is this part of a larger sell-off? Here are some of my thoughts:
- '21 ATH REJECTION - As I have said in many of my previous posts the '21 ATH @ $69,000 is a level that BTC just cannot seem to break. Since the beginning of this year BTC has printed an SFP (swing fail pattern) 6 TIMES! This outright refusal to break through clearly creates a problem and when LONGS have been exhausted trying to break through this impenetrable barrier, naturally price must retreat and start again from a point lower down, we are seeing that now.
- CARRY TRADE - The BOJ (Bank of Japan) has RAISED RATES from 0-0.1% to now 0.15-0.25% after the conclusion of its 2 day monetary policy review. This has not only cratered the NIKKEI 225 -13.5% (at time of writing) but that has also has a domino effect on other traditional stocks & indices. It may not seem like a big rate hike but the underlying meaning of the hike is the problem. With it comes a hawkish approach for the foreseeable and that has the rest of the world worried because it shuts the door to FREE CREDIT. When the Yen is free to borrow which it has been up until now it weakens JPY again USD, that free YEN is borrowed using assets as collateral and then used to invest into Real-Estate for example and yields more, keep the profit and pay back the JPY using USD which is gaining in strength, a two fold win. However, now that JPY isn't free to borrow and could potentially get more expensive to borrow in the future it means those people no longer have access to free credit and also the JPY is getting stronger against the USD. A two fold loss from what was a certain win. That has caused the panic and sell-off.
- GEOPOLITICAL LANDSCAPE - There is no denying the world is in a state of worry geopolitically. Lockheed Martin (LMT) is up 17% since July 1st and I don't think that is a coincidence when the the wider market, especially big tech is falling of a cliff.
When war is a possibility/ inevitability, risk assets struggle, this is only natural as investors play it safe and try to protect what they have. A growing selling pressure and a lack of buyers will cause a market to retreat every time.
This week I'm looking for BTC to form a new base for us to bounce from, with rate cuts coming from September onwards and a Weekly Bullish Orderblock filled this is a possible long term entry position in the making. Need to see some strength returning first but as the saying goes, buy when others are fearful and sell when they are greedy.
TL;DR
- '21 ATH SFP for the 6TH time this year, exhausted rally.
- JPY rate hike closing the door on carry trades, huge selling pressure.
- Geopolitical uncertainty, risk-off environment.
Note
A V-shaped recovery so far however I can't see it staying that way for long.
BTC is still below the weekly low which will be major resistance IMO.
Note
BTC is back within last weeks range.
Despite Monday's sell-off price has returned to where it was at the end of last week. A rapid V-shape recovery.
Now that BTC has hit its first major resistance level it will be interesting to see where it goes from here
- Continue the recovery rally, flip last weeks low as never support and target range midpoint.
- reject last weeks low and slow grind back down towards the $49,000 level in a more rounded shape and perhaps printing a double bottom on the HTF.
Closely monitoring these outcomes.
Note
As we go into the weekend BTC is back within last weeks range and found support at the 0.25 line.
A strong weekly close above $58,200 means that despite the Monday crash we finish the week green and within range which would be a great recovery.
Note
A bit of end of week volatility on the LTF.
Still needs to close on the daily above $58,200 for me to be a successful recovery.
This close along with tomorrow will set the standard for the rest of the week.
Note
I thought the WEEKLY CLOSE would be closely contested @ the RANGE LOW $58,200, and it was...
BTC barely finishing on a green candle but it did successfully in the end!
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