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Bitcoin shows more and more trouble defending the $30,000 markOver the weekend, the cryptocurrency market was relatively muted. Bitcoin continued to oscillate between $29,600 and $30,350. So far, it has not taken out a low at $29,508 from 18th July 2023. However, it also has not shown signs of stabilizing above $30,000. Therefore, we continue to wait for Bitcoin to either break below $29,508 or hold above the important psychological level of $30,000 (without dipping below it). If Bitcoin breaks below $29.508, it will bolster the bearish odds for the short-term; interestingly, below this level, there is an absence of any significant support until $28,452 (if not counting $29,000). Besides these price levels, we will pay close attention to MACD on the daily chart. Currently, it points to the downside, and if it breaks below the midpoint, it will be a strong bearish signal. The equally bearish will be if RSI continues to develop a bearish structure and Stochastic fails to reverse to the upside (on the daily time frame); the same applies to the convergence between DM+ and DM- (and eventual crossover). Contrarily, a bullish sign will be if MACD, RSI, and Stochastic start rising again, with DM+ and DM- diverging from each other. As for our stance beyond the short term, we continue to believe that a retest of 2022 lows remains a real possibility (especially if the economy experiences a strong recession instead of a soft landing). Illustration 1.01 Illustration 1.01 displays the daily chart of MACD. If MACD breaks below the midpoint, it will strongly bolster the bearish odds in the short term. Technical analysis gauge Daily time frame = Slightly bearish Weekly time frame = Neutral *The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of RSI, MACD, Stochastic, DM+-, ADX, and moving averages. Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
BITSTAMP:BTCUSDShort
by Tradersweekly
11
Whales taking profits, BTC testing $30,000Bitcoin reached a new high of $31,818 last Thursday. The next day, we voiced concern over the potential trend reversal due to the falling number of Bitcoin addresses with balances exceeding 100 and 1000 tokens, implying that big players were taking profits (the same thing happened in April 2023 after Bitcoin rose above $31,000, preceding the drop below $25,000). Since then, Bitcoin has been continuously testing psychological support at $30,000. At the same time, technical indicators like RSI, MACD, and Stochastic started to develop bearish structures on the daily time frame, and volume remained relatively low. To support the bearish thesis in the short-term, we would like to see Bitcoin drop below support at $29,508. In addition to that, we would like to see MACD cross below the midpoint and DM+ and DM- converge (eventually performing a bearish crossover). Contrarily, to support a bullish thesis, we would like to see Bitcoin stabilizing above $30,000 in the next week or so (and some technical improvements on the daily chart). With regard to this possibility, we will continue to pay attention to the number of wallets with large balances. If the decline among big holders stops, it will be slightly positive (and very positive if the number starts to grow again, suggesting accumulation among big players). Illustration 1.01 Illustration 1.01 shows the daily chart of BTCUSD and simple support/resistance levels. The red arrow indicates a decreasing volume over the past month, accompanying the rising price, which raises a question about the lack of buyers at elevated price tags (which is somewhat worrisome, considering that big players are selling). Illustration 1.02 Illustration 1.02 displays the weekly RSI. Interestingly, during recent highs in the price of Bitcoin, the RSI peaked only slightly below 70 points. A failure of the RSI to peak above 70 points is often associated with bear markets. Technical analysis gauge Daily time frame = Slightly bearish Weekly time frame = Slightly bullish *The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of RSI, MACD, Stochastic, DM+-, ADX, and moving averages. Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
BITSTAMP:BTCUSD
by Tradersweekly
25
Bitcoin is stuck between $30,000 and $31,500There has not been much going on in the cryptocurrency market, with Bitcoin being stuck between $30,000 and $31,500 for nearly a month now. During this time, the volume decreased, and indicators like RSI and MACD started to show signs of weakness on the daily chart. In addition to that, Bitcoin began to lag with gains behind the tech sector, which was previously exhibiting a high positive correlation with it. So, with the current choppiness in the price, we continue to wait for a breakout from the range. If Bitcoin breaks to the upside, it will be bullish for the short-term. Contrarily, if Bitcoin breaks below $30,000, it will be bearish. Illustration 1.01 Illustration 1.01 shows the bearish setup. Technical analysis gauge Daily time frame = Slightly bullish (with signs of exhaustion) Weekly time frame = Bullish *The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of RSI, MACD, Stochastic, DM+-, ADX, and moving averages. Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
BITSTAMP:BTCUSD
by Tradersweekly
29
BTC dominance, correlation with tech, and uncertain outlookBitcoin has been holding up above $30,000 for multiple days. At the same time, the number of large holders began to increase again (slightly), suggesting that whales are waiting for better prices and not selling yet. Overall, that is quite positive, but there are still a few things to watch out for that can cause the rally to reverse quickly. As a result, we are paying close attention to the daily chart, where several technical indicators show little signs of exhaustion. For example, MACD is flattening (potentially leading to a bearish crossover between the MACD and signal lines), RSI is struggling below 70 points, Stochastic points to the downside, and volume is very low. Ideally, for Bitcoin to continue higher, we would like to see all these components start rising again, with RSI breaking above 70 points; in such a scenario, we would expect the breakout above $31,458 and potentially $32,000. However, if RSI fails to cross 70 points to the upside in the next few days, it will be bearish for the short-term; the same will apply to the falling Stochastic and MACD. Besides watching these technical indicators, we also look at Bitoin’s market dominance and correlation with the U.S. tech sector. In regard to market dominance, Bitcoin has been taking away a market share from its competitors for the past few months. There have been numerous factors contributing to this situation, with one being regulatory scrutiny of altcoins. We believe this trend will persist in the next few months, with the U.S. Securities Exchange Commission labeling more assets that are now deemed “cryptocurrencies” as “securities,” sparking further capital outflow from the altcoin market. In our opinion, that will help Bitcoin solidify its first place in the cryptocurrency market (and going into the future). Now, in relation to Bitcoin’s correlation with the tech sector, we saw that in late May 2023, these two markets started to decorrelate slightly. This fact has been reflected in the correlation coefficient shown in Illustration 1.03. However, when Bitcoin rose above $30,000 in late June 2023, the correlation coefficient began to tick up. Considering that the U.S. stock market valuations seem to be stretched, we think it would be prudent to watch out for what is happening in the tech sector, as its weakness can once again weigh on the risk assets like Bitcoin. Illustration 1.01 The picture above displays the daily chart of BTCUSD. The green and red arrows show the divergence between the price and RSI from January 2023 until April 2023. We want to point out how RSI does not show significantly more strength (during the most recent rebound in Bitcoin’s price) compared to the mentioned period. Illustration 1.02 Illustration 1.02 shows the weekly chart of BTC.D, representing Bitcoin’s market dominance. Illustration 1.03 Illustration 1.03 portrays the daily chart of BTCUSD. Below the main chart is the correlation coefficient. It can be viewed that the positive correlation between Bitcoin and Nasdaq 100 Index started to strengthen in late June 2023. Technical analysis gauge Daily time frame = Bullish (with signs of exhaustion) Weekly time frame = Bullish *The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of RSI, MACD, Stochastic, DM+-, ADX, and moving averages. Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
BITSTAMP:BTCUSD
by Tradersweekly
1
Litecoin presents an interesting setup After finding its low at $40.32 in June 2022, Litecoin rose over 160% within the span of a half-year. However, since the February 2023 high at $105.69, Litecoin’s price trend has been erratic. Litecoin has been oscillating between the two converging bounds, forming an interesting setup that caught our attention. For now, we would like to stay out of the market and observe the situation. Ideally, we would like to wait for the price to approach one of the boundaries of the formation and then assess the opportunity. Illustration 1.01 Illustration 1.01 displays the daily chart of LTCUSD. Two converging lines can be seen forming a pattern that resembles a symmetrical triangle. Technical analysis gauge Daily time frame = Neutral Weekly time frame = Slightly bearish *The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of RSI, MACD, Stochastic, DM+-, ADX, and moving averages. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
COINBASE:LTCUSD
by Tradersweekly
13
Selloff is impendingYesterday, Bitcoin finally broke below $25,800 and established a new low at $25,389. This move came amid our recent speculation about Bitcoin potentially reversing the short-term/medium-term trend (from bullish to bearish). This fact is being reflected by Bitcoin making lower troughs and lower peaks after hitting $31,000 in April 2023. Due to that, we do not have any reason to change our bearish bias beyond the short term. Accordingly, we maintain our price targets of $15,000 and $13,000. At the moment, we are paying close attention to the support at $25,270. If the price takes out this level, it will further bolster a bearish case in the short-term/medium-term. In addition to that, we are also watching RSI, MACD, and Stochastic on the daily chart; all of them are currently pointing to the downside, which is bearish. In fact, if RSI breaks below 30 points, it will likely be accompanied by significant selling pressure. Therefore, we are raising a voice of concern over the impending selloff in the cryptocurrency market. Technical analysis gauge Daily time frame = Bearish Weekly time frame = Slightly bearish *The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of RSI, MACD, Stochastic, DM+-, ADX, and moving averages. Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
BITSTAMP:BTCUSDShort
by Tradersweekly
22
Uncertainty looms over the price of BitcoinOver the weekend, Bitcoin took off and broke above $27,666. Then, yesterday it reached a high of $28,452. However, Bitcoin failed to hold this level for an extended period and quickly faltered below the $28,000 price tag. What caught our attention is that Bitcoin fully retraced to the 50-day SMA, which successfully halted a buying spree. Furthermore, MACD and Stochastic started to reverse their direction to the upside, and DM+ and DM- performed a bullish crossover on the daily time frame. As a result, these developments leave us with a neutral outlook for the short-term/medium-term. To support a bullish case (for the short-term/medium-term), we would like to see Bitcoin break above $28,500 and MACD and Stochastic continue rising on the daily chart. Conversely, to support a bearish thesis, we would like to see Bitcoin struggling to take hold of the $28,000 level and fall below $27,666; in addition to that, we would like to see DM+ and DM- start converging with MACD, Stochastic, and RSI reversing to the downside. Illustration 1.01 Illustration 1.01 displays the daily chart of BTCUSD. The yellow arrow indicates the price retracement toward the 50-day SMA. Technical analysis gauge Daily time frame = Neutral Weekly time frame = Neutral/Slightly bearish *The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of RSI, MACD, Stochastic, DM+-, ADX, and moving averages. Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
BITSTAMP:BTCUSD
by Tradersweekly
11
Waiting for the trend reversal to be confirmed or refutedDuring the weekend, Bitcoin's value slipped under the $27,000 mark. Despite that, the overall trading environment was quiet and without any significant technical developments that we could point to on Bitcoin’s chart. Because of that, we just continue to wait patiently for our thesis to be confirmed or refuted. To confirm the thesis about Bitcoin reversing short-term/medium-term trends (and finding increasingly more resistance when attempting to reclaim $31,000), we would like to see it drop below $25,800. Contrarily, to refute this proposition, Bitcoin would have to break above $27,666 (and then continue testing the resistance between $28,000 and $28,500). As for our general stance, it remains unchanged. We continue to think that the past six months of Bitcoin’s rally merely represent the most deceitful bear market rally up to date. With that assessment, we maintain price targets of $15,000 and $13,000. Technical analysis gauge Daily time frame = Bearish Weekly time frame = Neutral *The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of RSI, MACD, Stochastic, DM+-, ADX, and moving averages. Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
BITSTAMP:BTCUSDShort
by Tradersweekly
20
BTC seems to be making lower peaks and lower troughsAfter peaking at $27,666 on Monday, Bitcoin drifted back below $27,000. This subtle fluctuation is not alarming, given the high volatility in the cryptocurrency market. However, what catches our attention is that Bitcoin seems to be finding growing resistance after pulling back from the 14th April 2023 high (and while trying to reclaim the $31 000 mark). After dipping to $27,998 on 24th April 2023, Bitcoin struggled to break above $30 000. Then, after faltering again (even below $27,998), it started to find a strong resistance near $28,000. This type of price action is reminiscent of short-term/medium-term trend reversal (as Bitcoin is finally starting to constitute lower troughs and lower peaks). Nonetheless, we would like to see the price fall below $25,800 to confirm this fact. Illustration 1.01 Illustration 1.01 shows the daily chart of BTCUSD. Yellow arrows indicate particular technical developments. Technical analysis Daily time frame = Slightly bearish Weekly time frame = Neutral Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
BITSTAMP:BTCUSDShort
by Tradersweekly
31
Bitcoin continues to fight resistance between $28,000-$30,000On Friday, Bitcoin dropped to $25,800, marking a fresh low since the peak on 14th April 2023. Following this drop, the price remained relatively stable on Saturday. Nevertheless, Bitcoin started to surge on Sunday, surpassing $27,000. Then today, it broke above $27,500. During this short period, several technical developments started to take place on the daily chart. In particular, the reversal of RSI and Stochastic (on the daily time frame) caught our attention as it is usually a bullish sign. However, with elevated market volatility, such reversals can be very deceptive (as RSI and Stochastic might start quickly reversing to the downside again if the price starts falling). Due to this potential deception, we will take time to better understand what is going on; we will pay close attention to MACD and ADX. If MACD stays below the midpoint, it will keep the bearish thesis for the short-term alive. Contrarily, if MACD breaks above the midpoint, it will likely foreshadow another retest of $30,000. As for the ADX, it currently indicates a bearish trend with growing momentum. Unless DM+ and DM- start converging (and ADX declining), this constellation will continue to support a bearish thesis in the short term. Illustration 1.01 Illustration 1.01 displays the daily chart of BTCUSD. Yellow arrows indicate recent technical developments. Simple moving averages (20-day SMA and 50-day SMA) act as resistance levels. Technical analysis Daily time frame = Slightly bearish/Neutral Weekly time frame = Neutral Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
BITSTAMP:BTCUSD
by Tradersweekly
20
Chickens are coming home to roostSince the dip in Bitcoin's value in November 2022, we have consistently alerted investors to the fact that Bitcoin is going through another bear market rally. For months now, this opinion has been widely unpopular among the majority of the investment community. Despite that, we have repeatedly provided evidence to support our thesis, emphasizing growing irrationality in the market, which has been reminiscent more of a 2021 peak than that associated with the market bottom. In fact, we proclaimed that the bullishness accompanying the rally is higher than during any other bear market rally in 2022, making an excellent case for the most deceitful bear market rally to date. Over the past week, Bitcoin has been experiencing elevated selling pressure, driving it as low as $26,100 today. Interestingly, this price action accompanies unverified rumors of the U.S. government’s sale of Bitcoins (remember, in March 2023, the U.S. government announced plans to sell 41,139 Bitcoins, and reportedly it sold the first batch of 9,861 units around 14th March 2023; the nominal value of this trade was around $215 million). Following the first sale, we noted that while this execution did not leave a mark on the price, its significance should not be underestimated in the future; in a nutshell, we said that under different conditions (with lesser liquidity in the market, for example), the effect could be more impactful (on the downside) to the price; we continue to maintain this notion. As for the technical indicators, we continue to observe MACD, which broke below the midpoint, bolstering bearish odds in the short term. In addition to that, we also watch RSI and Stochastic, which continue to develop bearish structures. Besides that, we also monitor DM+ and DM-, which performed a bearish crossover; now, we would like to see growth in ADX which would suggest a strengthening bearish trend. As for our price targets, they remain unchanged at $15,000 and $13,000. Illustration 1.01 Illustration 1.01 shows the daily chart of BTCUSD. The yellow arrows indicate a bearish breakout below $26,981 and a bearish crossover between the 20-day SMA and 50-day SMA. If the price breaks below Support 1, it will further bolster the bearish odds. Technical analysis Daily time frame = Bearish Weekly time frame = Neutral Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
BITSTAMP:BTCUSDShort
by Tradersweekly
35
Binance halts BTC withdrawals and spooks the marketBitcoin futures closed slightly below the $30,000 mark (at $29,910) last Friday. However, the price took a nosedive over the weekend as Binance temporarily halted Bitcoin withdrawals and transfers, citing an overwhelming number of pending transactions. On Monday, Bitcoin futures opened at $29,105 and continued lower toward the $28,300 price tag where they currently trade. We pay close attention to MACD on the daily time frame, which continues to develop a bearish structure. In addition to that, we observe volume levels, which are considerably lower compared to a recent period when Bitcoin was moving sharply higher (in so-called spikes). That is an interesting development as the addresses with more than 100 and 1000 Bitcoins in the balance are not seen growing in number in the past two weeks; meanwhile, the number of addresses with much smaller balances continues to grow, suggesting that retail continues to accumulate. We previously expressed our beliefs that it is very likely that we will see a massive rag-pull being played on retail investors, and that continues to be the case. Our stance remains unchanged as we believe the most deceitful bear market rally continues to unravel. Accordingly, our price target for BTCUSD stays at $15,000 and $13,000. Illustration 1.01 Illustration 1.01 displays the daily chart of Bitcoin's continuous futures. If the price breaks below the sloping support, it will bolster the bearish case in the short term. The same applies if MACD performs a crossover below 0. Illustration 1.02 Illustration 1.02 displays the daily chart of BTCUSD across various exchanges. We would like to point out the similarity in volume trends on all these exchanges. Volume dropped significantly compared to the two previous major legs up (from around $17,000 to $25,000 and $19,500 to $31 000). Illustration 1.03 The picture above shows simple support and resistance levels derived from peaks and troughs. Technical analysis Daily time frame = Neutral Weekly time frame = Neutral Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
BITSTAMP:BTCUSD
by Tradersweekly
19
What are all types of BTC adresses doing? Just recently, we remarked on Bitcoin’s positive reaction to weakness in the U.S. banking sector. We said that, potentially, Bitcoin started to show the first signs of maturing as an asset Furthermore, we said that we would pay very close attention to its price action during the banking earnings season. Intriguingly, Bitcoin started to drop with solid earnings from major banks (marking the top above 31 000$ on the same day as JPM, C, and WFC reported their earnings). However, a few days later, it started to show signs of strength as regional banks (mainly First Republic Bank) revealed persisting problems in the industry (followed by FRC shares dropping more than 49% on 25th April 2023 and another 29% yesterday). In the same time span, Bitcoin rebounded from 26 931$ back to 30 000$. As this raises more questions about Bitcoin maturing as an asset (and becoming what it was intended to be), we think it is important to look at Bitcoin addresses to determine whether this might be only a temporary shift or a lasting trend. For this purpose, we will focus on a period starting in November 2022, which marked the 2022 lows for Bitcoin and coincided with a big expansion of Bitcoin addresses. Addresses with balances of more than 0.01 BTC, 0.1 BTC, and 1 BTC (first category - small investors) Based on the information obtained from LookIntoBitcoin, Bitcoin addresses with more than 0.01 BTC in the balance stood at 10 816 039 on 1st November 2022. This figure rose to 11 774 869 on 25th April 2023, marking an increase of 8.8% (accounting for a 2% increase from 1st March 2023 until 25th April 2023). Addresses with more than 0.1 BTC rose approximately 11.92% from 1st November 2022 until 25th April 2023 (from 3 855 510 to 4 315 213 addresses); meanwhile, the increase in the number of addresses from 1st March 2023 until 25th April 2023 amounted to 1.8%. Next, Bitcoin addresses with more than 1 BTC in holdings stood at 909 577 on 1st November 2022. This figure rose to 994 701 on 25th April 2023, representing a 9.37% increase over the past six months (but showing only a 1.23% increase between 1st March 2023 and 25th April 2023). Overall, all three types of addresses in the “small investor” category saw relatively significant increases (with big spikes in the number of addresses following November 2022 lows). Addresses with balances of more than 0.01 BTC, 0.1 BTC, and 1 BTC (first category - medium investors) As for Bitcoin addresses with more than 10 BTC in the balance, these rose from 150 873 on 1st November 2022 to 155 967 on 25th April, showing a growth of 3.37%. Meanwhile, these addresses rose only 0.28% between 1st March 2023 (from 155 522) and 25th April 2023. The growth in the number of addresses in this category was significantly less than in the previous category of “small investors.” Addresses with balances of more than 100 BTC and 1000 BTC (third category - large investors) Addresses with more than 100 BTC in the balance saw an uptick from 15 848 on 1st November 2022 to 16 160 on 19th December 2022. However, as the price increased, these addresses slowly declined (until reaching 16 018 on 8th April 2023). Interestingly, at that time, Bitcoin reached 28 600$, and the number of addresses started to shrink very quickly (suggesting that big players were unloading their holdings into the hands of smaller investors, just like we speculated); the number fell to 15 819 on 16th April 2023, accompanying Bitcoin above 30 000$. Then, once Bitcoin started to drop below this critical level, the number of addresses rose slightly (reaching 15 891 on 25th April 2023). Finally, the most prominent addresses carrying more than 1 000 BTC amounted to 2 135 on November 2022; however, this figure dropped to only 2 019 addresses on 25th April 2023, marking a 5.43% decrease (and a decrease of nearly 20% from an all-time high of 2 490 on 8th February 2021). Growth trends among addresses in the “large investors” category paint a stark contrast to what is going on in the preceding two categories. With that said, we think it is very likely that we are seeing merely a temporary shift in Bitcoin reacting to the banking sector. Based on this discrepancy, we continue to think that small investors are buying from more savvy traders and will end up holding the bag in the end (which we warned about already a few weeks ago). Because of that, we think it is important to be very cautious, especially as market volatility is picking up as fast as it is. Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Editors' picks
BITSTAMP:BTCUSD
by Tradersweekly
55
Are weak regional banks causing another rush into Bitcoin? Over the past six months, we reiterated our notion that we might be seeing one of the most deceitful bear market rallies in Bitcoin. We also outlined multiple developments that raise questions about a genuine bull market and highlighted extremely bullish sentiment, especially among retail. Then, with the fallout of regional banks and Bitcoin’s positive reaction, we stated that Bitcoin might be starting to show first signs of maturing as an asset. However, we also said that we would pay close attention to banks’ earnings and see further Bitcoin’s reactions (in order to determine the importance of this shift). On 14th April 2023, major banks, including JP Morgan Chase, Citigroup, and Wells Fargo, reported solid earnings for the first quarter of 2023. Interestingly, this date coincided with the top in the price of Bitcoin. Four days later, on 18th April 2023, Goldman Sachs reported its results, and Morgan Stanley with U.S. Bancorp followed the next day. Overall, earnings showed mixed data, with banks still making good profits but experiencing a slowdown in lending and declining average deposits. Bitcoin lost about 12.5% of its value from 14th April 2023 until 24th April 2023, when it dipped below 27 000$. This date coincided with the day when First Republic Bank reported its earnings (after the market close), leading to a more than 49% slump in the price of shares yesterday. Bitcoin reacted positively to this and jumped more than 6.5%. At the moment, it trades near the 29 000 price tag, slightly below the important resistance at 29 380$. Therefore, we will pay close attention to the cryptocurrency’s behavior in this area and resistance at 29 380$; a breakout to the upside will be bullish and diminish bearish odds in the short term. Contrarily, a failure to hold above this level will add to bearish odds. We will also observe volume and technical indicators. RSI and MACD started to flatten on the daily time frame, with DM+ and DM- performing a bullish crossover. That suggests there is still a chance Bitcoin can continue higher. Accordingly, we remain very cautious and will monitor the price action and market developments in the following days. Illustration 1.01 Illustration 1.01 shows the daily chart of BTCUSD. Yellow arrows indicate particular days on which banks reported their earnings. Illustration 1.02 Illustration 1.02 displays the 1-minute chart of BTCUSD. Yellow arrows indicate when Alphabet and Microsoft reported their earnings for the first quarter of 2023 (leading to a jump in the Nasdaq 100 and Bitcoin). High correlation with the Nasdaq 100 continues to threaten the higher price of Bitcoin (especially if the Nasdaq 100 starts giving up these gains). Technical analysis Daily time frame = Slightly bearish/Neutral Weekly time frame = Neutral Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
BITSTAMP:BTCUSD
by Tradersweekly
17
Bitcoin might be approaching highly volatile territoryBitcoin dropped approximately 12% from its recent highs. By doing so, it retraced toward its 50-day SMA, which acts as an important support level. In addition to that, MACD, Stochastic, and RSI started forming bearish structures on the daily chart, causing us to be very cautious. Due to that, we will pay close attention to the stock market (especially Nasdaq 100), which continues to be highly correlated with Bitcoin and may spell more trouble for cryptocurrencies if it manifests weakness. Furthermore, we will monitor volume and technical indicators to give us more clues as to where Bitcoin is headed next. Overall, our stance has not changed. We continue to think that over the past few months, we have seen one of the most deceitful bear market rallies, and Bitcoin is due to see new lows in 2023. However, it is also still premature to declare a victory. Therefore, we emphasize caution as we believe the market might be approaching a highly volatile territory. Illustration 1.01 Illustration 1.01 displays the daily chart of BTCUSD and 50-day SMA. Yellow arrows indicate bearish breakouts below critical support levels. We will pay close attention to the 50-day SMA and its ability to stop selling pressure. If it fails, it will be bearish. Contrarily, if it succeeds, it will be bullish, and Bitcoin might attempt to retest 30 000$. Illustration 1.02 Illustration 1.02 shows the daily chart of MACD. If it breaks below the mid-point, it will bolster the bearish case. Technical analysis Daily time frame = Bearish Weekly time frame = Neutral Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
BITSTAMP:BTCUSDShort
by Tradersweekly
15
The daily time frame shows some bearish signsIn our recent analysis, we noted that Bitcoin entered proving grounds above 30 000$, where it would be decided whether we saw a market bottom in November 2022 or not. We outlined how Bitcoin's struggle to hold above this critical level would support our bearish thesis about the cryptocurrency market revisiting its 2022 lows in the coming months. Then yesterday, Bitcoin broke below 30 000$, dipping as low as 29 122$ (before reversing back above 30 000$, which interestingly coincided with the Goldman Sachs earnings release). Nevertheless, the invalidation did not last long, and today, Bitcoin again broke below the critical level of 30 000$. Currently, it trades near the 29 300$ price tag. We will pay close attention to the price and see if it will take out yesterday’s low. If yes, then it will bolster the bearish case in the short term and potentially suggest that we have seen a top for Bitcoin’s rally. However, we would like to see more developments on the chart to confirm this fact. Because of that, we will observe RSI, MACD, and Stochastic in the following days. We would like to see them declining further, increasing bearish odds in the short term. Illustration 1.01 Illustration 1.01 shows the daily chart of BTCUSD and the setup with a bearish trigger below 30 000$ (requiring a tight stop-loss). [ i]Illustration 1.02 Illustration 1.02 displays the daily chart of BTCUSD and three technical indicators, including MACD, Stochastic, and RSI. Technical analysis Daily time frame = Slightly bearish Weekly time frame = Neutral/Slightly bullish Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
BITSTAMP:BTCUSDShort
by Tradersweekly
14
Bitcoin enters proving groundsYesterday, we noted that a breakout above the Sloping resistance and 29 380$ would be bullish for Bitcoin in the short term. What led us to this quick assessment was the similarity of the pattern found on the 1-minute chart, which seemed very familiar to us. It was, once again, a quick spike in the price within a short interval (very similar to the ones we showed previously on 1-minute graphs). Shortly after that, the price broke to the upside, bringing Bitcoin to a critical zone above 30 000$. Interestingly, this move precedes the start of earnings season in the banking sector, which helped to prop up the price recently with the crisis among regional banks. While Bitcoin’s reaction to the crisis might be considered the first potential sign of maturing and gaining more functions (than just being a speculative vehicle), let’s not forget that it still faces many obstacles that may derail it from the intended path. These obstacles include a lack of the regulator’s clarity on its future plans, especially as central banks attempt to develop their own digital currency (CBDC). For example, there might be a potential cryptocurrency crackdown in the form of restricting money transfers to/from cryptocurrency institutions or any other forms that will make it very inefficient for a consumer to use them. Furthermore, the U.S. government still plans to unload its stash of more than 41 000 Bitcoins seized in connection to the Silk Road bust. This amount might not seem as much compared to the daily volume. Although we think this action's timing is also crucial and something that many people seem to underestimate; illiquid markets require less “firepower” to move the price (it applies to both directions). In addition to that, high-interest rates finally start to manifest their impact on the consumer, for whom it is harder to service debt and pay for goods with elevated inflation. As a result, this might put many people in a position where they will have to decide whether to pay bills and get food or hold on to the cryptocurrency stash (rising unemployment will also contribute to this). With these issues and many more, we think it is still premature to call the winning shots. Because of that, we will now focus on the area between the psychological level of 30 000$ and 32 951$ (which acted as support in early May 2022). To abandon our thesis about the bottom not being in, we would like to see Bitcoin consolidate in this area like it did around 28 000$ (just over the past two weeks). Furthermore, we would like to see a continuous build-up in volume accompanying higher prices. Then, we would also want to see a breakout above the zone, which would greatly diminish the odds of our thesis about Bitcoin retesting its 2022 lows. To support our bearish thesis, we would like to see Bitcoin struggling to hold above 30 000$ and a lack of volume in the market. Illustration 1.01 Illustration 1.01 displays the 1-minute chart of BTCUSD. The yellow arrow indicates the first anomaly. We previously said that similar moves often kept accompanying the price to new highs, especially during the weekend or shortly after the futures market close (in generally illiquid markets). Illustration 1.02 Illustration 1.02 shows the 1-minute chart of BTCUSD. The second anomaly occurred right after the futures market opened, where Bitcoin jumped by 500$ within the first three minutes of trading. Technical analysis Daily time frame = Bullish Weekly time frame = Bullish Illustration 1.03 The picture above shows the daily chart of BTCUSD. The yellow rectangle shows the critical zone between 30 000$ and 32 951$. Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
BITSTAMP:BTCUSD
by Tradersweekly
38
Ethereum shows some signs of exhaustionSince the summer of 2022, we have maintained a bearish stance on Ethereum, with price targets at $1000 and $900. Furthermore, throughout several months, we have repeatedly stated that the attractive area for short (re)entry is between $1500 and $1600, while the area near $1200 is associated with higher risk. Today, we continue to hold that notion. Despite bullish developments on multiple time frames, we disagree with calls for the primary trend reversal. That is because market sentiment and the rally's nature do not reflect a healthy recovery. Contrarily, the rally seems to be driven by emotions. In addition to that, the reality is that the FED is set to continue tightening, which will cause more problems in the stock market. Because of the high correlation between the stock and cryptocurrency markets, we expect this to weigh on the price of ETHUSD. Furthermore, we anticipate more problems on the institutional side of the market, threatening the overall market’s health. As a result, we have no reason to change our bias. Illustration 1.01 Illustration 1.01 displays the daily chart of ETHUSD and sloping support. To support a bearish thesis, we want to see the price fail to break above Resistance 1. Otherwise, a breakout will suggest a short-term continuation of the rally. Illustration 1.02 Illustration 1.02 shows a bullish build-up in volume that led ETHUSD to recent highs. However, near elevated price tags, volume can be seen dropping significantly. Therefore, we are very cautious. Technical analysis Daily time frame = Bullish Weekly time frame = Slightly bullish Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
BITSTAMP:ETHUSDShort
by Tradersweekly
27
The U.S. government is unloading 1000s of BTCs into your handsIn the past five months, we showed multiple odd developments on the 1-minute charts, which included sharp upticks in the price of Bitcoin, often leading to new highs which lasted only a few seconds during the weekend or shortly after the close in the futures market (in generally illiquid markets). In addition to that, we noted that many of these price movements looked artificial and unhealthy to sustain the rally in the long term. As a result of that, combined with tight monetary policies, worsening economic conditions, and other factors that are typically bearish for risk assets like Bitcoin, we concluded that the market has not bottomed out. Accordingly, we maintained our bearish outlook beyond the short term with the notion that Bitcoin would return to its 2022 lows over time. During the same period, we noticed that sentiment among retail investors turned extremely bullish and arguably even more so than on previous rebounds. We warned about this deceitful nature of bear market rallies several times in the past year, always outlining those same developments - people getting overly bullish while dismissing the reality and surrendering to so-called “FOMO” (while telling everyone else that they are missing out on a “lifetime opportunity” if they are not invested). This theme became central to the cryptocurrency market and even stronger with the recent banking fiasco in the U.S. and Europe, prompting many people to revolt against “irresponsible” bankers and governments by buying Bitcoin. However, before the weekend (and two weeks after our warnings about retail investors ending up holding the bag), big news came out regarding the U.S. government and its sale of Bitcoins seized thanks to the Silk Road bust (a stash of about 50 000 Bitcoins). The U.S. administration reportedly sold approximately 9 861 Bitcoins valued at about $216 million in March 2023. Furthermore, the government seeks to unload the remaining 41 139 Bitcoins during the course of the current year (in multiple batches). We expect this to be conducted with the maximum benefit to the government. Moreover, if we were to take any lesson from commodity traders within the U.S. government in the past year, we would point out their successful game in the oil market, where they happened to sell oil at highs last year, only to seek a refill of Strategic Petroleum Reserves near the lower end of $70 in 2023. That leads us to speculate that the U.S. government does not foresee much higher prices (from the current level) at which it would otherwise sell its stash. Overall, we think the whole situation is growing increasingly ironic because of the fact that so many people seek to buy Bitcoin in order to get away from the system, and instead, the government will dump its holdings into their hands, leaving them with less than what they paid for at the end. Illustration 1.01 Illustration 1.01 shows the daily chart of BTCUSD. The red and green arrows indicate particular technical developments which raise questions about the rally's sustainability (the rising price accompanied by declining volume and divergence between the price and RSI). The yellow arrow indicates an area of interest, which we will pay close attention to in the following days. Technical analysis Daily time frame = Neutral Weekly time frame = Bullish (weak trend) Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Editors' picks
BITSTAMP:BTCUSD
by Tradersweekly
75
The CFTC seeks permanent trading ban on Binance's tradingYesterday brought an intriguing development in the cryptocurrency market as Commodity Futures Trading Commission (CFTC) charged Changpeng Zhao (Binance’s CEO), Samuel Lim, and three other legal entities operating collectively as Binance with numerous violations of the Commodity Exchange Act (CEA) and other CFTC regulations. In the release document, the agency states that it seeks “disgorgement, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the CEA and CFTC regulations,” which paints a stark contrast to a tone used in previous cases against cryptocurrency exchanges. According to the complaint, Binance’s CEO urged employees to circumvent compliance controls to maximize profits. The document alleges that for the relevant period since 2019, the exchange did not require its customers to provide any identity-verifying information before trading on the platform, failing to comply with anti-laundering, anti-manipulation, and anti-terrorist laws. Furthermore, the document alleges that the exchange’s management prompted its employees to use a message-deleting application (supposedly Signal) in order to destroy evidence about the malicious conduct. The complaint states that the defendants “conducted certain activities outside the U.S. designed to avoid CFTC regulation, such as intentionally structuring their entities and transactions to avoid registration requirements and instructing U.S. customers as well as other customers as to how to evade Binance’s compliance controls.” As if it was not enough, the document also notes that Changpeng Zhao traded on the exchange's platform through approximately 300 accounts linked to him directly or indirectly (accounts owned by Merit Peak and Sigma Chain are also mentioned in the document), failing to disclose this fact to customers while also not subjecting mentioned accounts to any anti-fraud or anti-manipulation surveillance or controls. These are just some of the highlights from the 74-page-long complaint that asserts Binance’s management was aware of the United States regulatory requirements but ignored them. As such, the lawsuit against Binance, combined with the ambitious goals of the CFTC (to impose a permanent trading ban on the exchange), may spill colossal trouble for the cryptocurrency market. Due to that, we raise a word of caution to investors; if you are naive and trusting, dismissing all of the developments as “FUD,” then you better be ready for a harsh lesson. Nevertheless, our outlook stays bearish, and we expect Bitcoin to retest its 2022 lows in the coming months. Illustration 1.01 . The picture above shows the daily chart of BTCUSD. The red arrow shows declining volume, which we described as a questionable development (as for the rally's sustainability). We would like to see an uptick in volume accompanying the price drop to bolster a bearish case in the short term. The weakness in the stock market (especially the highly correlated tech sector) will also bolster this thesis (as we previously noted that a rebound in stocks would provide a temporary lifeline for cryptocurrencies). Technical analysis Daily time frame = Neutral Weekly time frame = Bullish (weak trend) Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Editors' picks
BITSTAMP:BTCUSDShort
by Tradersweekly
138
Bitcoin is finding a strong resistance between $27 000 - $28 500Since our last update on Bitcoin, not much has happened in the cryptocurrency market. Bitcoin oscillated between $27 000 and $28 500, finding strong resistance around this level. Meanwhile, volume continued to decline, still raising a question about the rally's sustainability. Overall, the bullish trend started to weaken, turning more into a neutral one. However, we remain cautious as low liquidity in the market may cause a volatile move in either way. We previously outlined that the rebound in stocks would provide a temporary lifeline for BTCUSD. Therefore, we will continue to pay close attention to the stock market, mainly the tech sector, which stays highly correlated with Bitcoin. Sooner or later, we expect it to break down and drag cryptocurrencies with it. In fact, we would not be surprised to see investors taking profit in order to cover losses elsewhere (just like on previous occasions in gold). Thus, we stick to our previous assessment that the current rally will likely turn out to be only another bear market rally. Illustration 1.01 Illustration 1.01 displays the 1-minute chart of BTCUSD on 24th March 2023. The yellow arrow indicates a huge spike in the price of an asset. However, the spike to $29 380 lasted about a second and is not observable on other exchanges. Therefore, it can be considered a glitch and discarded from observation. Technical analysis Daily time frame = Bullish Weekly time frame = Bullish Illustration 1.02 The picture above shows the daily chart of BTCUSD within the ascending channel. The green and red arrows indicate the growing price accompanied by a declining volume, which is a questionable development (as for the rally). The yellow arrow indicates the price’s return back into an ascending channel. Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
BITSTAMP:BTCUSD
by Tradersweekly
30
Are you ready to hold the bag?Over the past few days, the market situation calmed down a bit, and stocks reacted positively to the rescue of Credit Suisse and regional banks in the United States. We previously noted that a relief in Bitcoin would be closely tied to the rebound in stocks, which continues to be the case. People remain bullish, arguing that the recent aggressive uptick in prices only shows how bullish the market has become. One of the common arguments is that Bitcoin would not rise so steeply (and so fast) if we were in a bear market. However, we want to remind our readers that the enormous magnitude of the move-up does not necessarily mean we are out of the woods. For example, during one particular correction in 2018, Bitcoin jumped almost 100% within two weeks. Yet, despite that aggressive move (accompanied by euphoria and bullish forecasts), Bitcoin still managed to erase over 73% of its value in the following months. The reality is that bear market rallies are well-known for their deceptive nature, which causes market participants to reassess their views, hook them on, and then surprise them with an abrupt change of direction (leaving them to hold the bags). We expect the current rally to be no different. Why? Because in the big picture, nothing has changed. The FED is still poised to increase interest rates next week, further pressuring the (already) weak economy. As a result, we anticipate investors to sober up once they find out there is still no pivot on the table and more signs of recession appear. In turn, we expect this to weigh heavily on the stock market, which stays highly correlated to Bitcoin, dragging it down with it. Illustration 1.01 Illustration 1.01 shows the correction of the downtrend in 2018 when Bitcoin rose nearly 100% within two weeks. Despite this enormous move, Bitcoin did not cease the bear market and ended up erasing over 73% of its value in the next 298 days. Technical analysis Daily time frame = Bullish Weekly time frame = Neutral/Slightly bullish Illustration 1.02 Illustration 1.02 displays the daily chart of Bitcoin around 2014/2015. A rally of more than 160% can be observed, taking place only within 19 days. Again, despite this abrupt move up, Bitcoin declined more than 84% over the course of the following year. Illustration 1.03 The picture above shows the daily chart of Bitcoin. The yellow arrow hints at declining volume, which is highly worrisome. Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Editors' picks
BITSTAMP:BTCUSD
by Tradersweekly
288