BITCOIN | FA and TA FULL BREAKDOWN ! Weekly 21EMA bounce 🚀Today is a great day to sit back and analyse the Bull of all Bulls, Bitcoin, the boat tide that rises all tides is here to stay for diversifing portfolios due to the increased demand of alternative assets to hedge agaisn't the current fiat monetary system that depreciates significantly over time. The keys to stay in the market long term are on constant development and risk management. Like if you think that this idea has value, I want to grow in TradingView.
Bitcoin is well under pressure, but you should be calm cool and collected especially if you are holding without any time of leverage and you have to approach the bull market with multiple stratigies, which means borrowing agaisn’t BTC (experts only), lightly leverage. But if you’re not trading too high of a time preference (hourly).
Because I have this understanding of the 4-year cycle, what happens at this time of it, I feel even more confident about what is happening to the price.
Being in the right side of this market can be difficult at first, but after you get the ropes it's not as complicated as many think.
The ammount of new people coming into the market is high (around 300k on Binance alone) therefore I want to share Cryptofunded's view on this current price, doing an in-depth technical and fundamental analysis on the buy (long) position hodl the king.
That’s the most important posture to have today, the analogy is someone just did a cannibal, that someone just happens to be the second richest man of the world, this is coming off the super hot cpi print yesterday, the market were really uncertain. There was major uncertainty yesterday, and Elon which is under investigation by the SEC for manipulation which is trying to set up a problem with BTC renewable mining which Tesla could find the answer to comes out with this tweet which totally muds the water. Hes like cannibal he just into the lake, and kicks up all the mud and dirt and you look up from the water and you’re like it’s muddy. You know what, let’s step aside for a second, wait for that to settle so we could get a better look what’s going on.
And that is the most important posture to have today. Before I dive into the tecnicals, and by the way how beautiful it is let’s take a look of how the fundamentals are looking:
Fundamentals:
My first reason to stay bullish mid-long term Bitcoin is due to it's extremely strong fundamentals, something we have never seen before. The traits of money that puts the first cryptocurrency in the top list include: scarcity, fungibability, portability, durability, divisibility, security, transactability, decentralized, coiunterfeit proof. It is a hedge againsn’t the irrensposbile expasion of the monetary supply and inflation. It’s something that appreciates value over time.
The institutions and big traditional banks (Goldman Sachs, Fidelity, JP Morgan, etc) are introducing crypto to their clients, which is a major step towards adoption for this space.
The on-chain metrics ( glassnode.com ) that shows how people around the network is behaving towards keeping Bitcoin stored (strong hands), instead of seeling them for quick returns. The ammount of BTC moving out of exchanges surpasses by far the ammount of sellers, and the old wallets (wales, long time hodlers) are bullish on the coin due to the increased accumulation on it's adresses also miners are stockpiling the crypto seeing potencial rise in value, these are just some of the bullish aspects that Glassnode smart analysis has to offer.
The fear and greed index is a great tool for market psychology analysis. The alternative.me fear and greed index is at low levels, such as 31 (Fear), reaching lows of April 26th, when we had a dump. As simple as it might be, it's an optimistic sign when people are feeling bearish (fearful) on the market and the opposite is true!
Market liquidations: much of the movement today was caused by a large sum of long/short liquidations during the crash, something that is usually interpreted as a liquidity grab (SFP) and manipulation of price just to fail to break the low/high and resume the trend. This pattern has been repeditely seen both in the crypto and traditional markets, it's a point of extreme bullish/bearish momentum that gets the majority to be on the wrong side. This is usually caused by overleveraged positions getting sold/bought at liquidation (margin call) levels, using isolated margin and proper risk management can avoid this issue.
Stock to flow model continues it's trajectory to a fair value of $100000 per Bitcoin, which will be fulfilled on this cycle.
Crypto cards are getting more and more common, usually partnered with VISA, which has the dominance of the market share of transactions by 48% worldwide. This is a huge step towards adoption, as it is very easy now to spend your crypto with any merchant, from groceries to traveling. The word of the cards are spreading rapidly, with the support of reward programns that incentivises users to share a referall code to friends and they both get free money when one deposits.
The ammount of products being offered today by major exchanges are increasing and the knowledge and awareness of such products (Earn, Lend, Stake, Syndicate, Supercharger) will spread as the network grows. Cryptocurrency offers the most secure and formidable rerturns on USD (stablecoin), with APY rates going up to two digits, depending on the exchanges, these rates are payed with the companies profits and lending mechanisms, which are controlled by risk systems to keep the collateral stable and also the returns safe from lending clients.
Yesterday, Elon Musk tweeed that suspended vehicle purchases using Bitcoin, which is not bearish, it was a reason for gamblers to go short and push liquidation levels to extreme over-sold levels that we've seen. Our approach to news is very pinpointed, show me the charts and I'll tell you the news. I don’t see Bitcoin being used for transactions that much anyway, this is not a bad signal at all, and it’s clear that on the tweet they are looking for alternative (alts) cryptos. Bad timing that caused all the liquidations and breakdown.
Yesterday with an over reaction of an one hot inflationary print, Jerome is telling us that we will have one raise temporarely, it’s never going to come back down, it’s a question of when not if until the next move up to higher inflation. Knowing full well that his policies are causing the jobs to go away permanently, the gov is paying people to stay home, it’s called UBI (universal base income).
Using these fundamental indicators, I believe the crypto markets are showing value. Overall, the fundamentals currently look good for the crypto markets.
Technicals
Strong signs that a bottom for the 31% top to low correction is in will be covered on this technical analysis breakdown:
We have seen extreme sell off pressure ignited by a technical 4h bull flag breakdown.
The high timeframe low is still intact ($43300) and it will serve as an key support in the upcoming days if we are to continue the bearish momentum to the lower support region.
An strong bull market figure indicator is the 21EMA on the weekly timeframe, which got tested today with a nice bounce so far. It hasn't been tapped since August 2020. On this chart, the orange moving average is the weekly 21EMA, it is the 147EMA on the daily.
An weekly level of demand (previous ath at 42084) has not been fulfilled and it will provide great entry with a good risk/reward on that level, it can be used as level to place SL's below, therefore there may be another liquidity grab into this level (SFP).
The 61.8% non-log scale fibonacci retracement also known as golden pocket/ratio, it's the highest probability of a bounce in any chart. This level ($42629) is hovering as strong support just below the level as the previous daily swing low, which would be arguably a double bottom zone. The 50% log scale fibonacci retracement from the low $28802 to the ATH $65000 on the Bitmex chart (MM) is at $43268, which has confluence with the next point:
This is likely an ABC correction formation from the elliot wave theory, and usually waves C (the wave we're in) end on the trend-based fib extension 1:1 of AB (the same impulse/correction size). The 1:1 level of AB non log-scale is at 41816, and the log-scale (more reliable due to the 20%+ movement) is at 43253. Both these levels will have smart money elliot wave traders with buy limit positions.
The corrective chart pattern that Bitcoin is forming is a symmetrical triangle, a descending channel or a bull flag. It's been 29days (1month) since the ATH and into the correction and we can now start to see the chart formation that it's forming, which looks very corrective as long as it doesn't break the lower trendlines.
The fact that we broke the daily low on a 1h wick does not mean that the continuation is imminent, as mentioned on the fundamental indicators, an possible SFP was formed to grab liquidity for the overall trend move to happen. This is usually called a fake break and it causes the big orders to get filled, essencialy taking the weak hands and overleveraged traders off their positions and getting the smart money in.
The volume indicates that a decreasing volume for multiple weeks has implied a declined interest in Bitcoin, while the altcoin market was booming with DOGE hitting unprecedented valuations, now the king may regain the dominance and attention. Right now BTC dominance is about 44%, it’s almost with a few weks different where we were back in 2017, now we should start to see a outperformance from Bitcoin. We’re not chasing momentum, we’re pre-empting it.
The daily chart is having a bearish EMA cross, the 21 corssing over the 50, which indicates a slow in momentum to the upside, but remember, indicators are lagging forecasts of price, it's not leading.
The RSI is indicading extremely oversold levels on the 4h timeframe, levels not seen since April 23rd, when Bitcoin crashed into 47k. After that, a big 4h hammer SFP wicked into those 23rd lows to grab liquidity then bounced to 59k.
ETHBTC could spike up toward .13, we’re probably not going to see last cycle’s ATH on this chart, watch this price action closely, you could use the daily timeframe to not exit before a lower low.
Bitcoin is doing it's best to reclaim levels, we still got a lot to go to before being mid-term bullish again after this massive move up.
Essencialy, Bitcoin bullish structure is intanct. For perspective, last time we wicked down as an liquidity grab, price only bounced 5% from the low of the 4h hammer SFP compared to this 13% one we had, showing extreme bullish pressure to the upside. A correction low is likely in, if not, we still got plenty of support on the 39-43k range that we'll look to accumulate more.
If you have any questions and comments feel free to leave them below.
