This week has been extremely choppy for the entire market. Adding to this, the sheer swing of the moves definitely caught a majority of traders out. As mentioned in the previous market update, there were absolutely no signs or signals of directional bias, so anyone that got caught in the volatility only has themselves to blame.
Time to forget the past and move forward. Bitcoin is looking quite bullish today, and many people have pointed out that price action looks very similar to $3,200. This is leading most of Twitter to believe that the bull market is back on its way.
However, let’s not get caught up with biases when there are no clear signals on today’s chart. There is still a good possibility that the market moves down, and you won’t be able to anticipate it if you formulate a thesis with no evidence backing it.
Price action on altcoins is looking strong in the short term. Bitcoin is rising and altcoins are refusing to dump; this is truly a fun sight to behold.
Our primary bias is still tingling toward the bearish side, but we also see there is a very high possibility that the market has bottomed out. If we pick out price action from the last time BTC corrected in this range, it indicates there is one final short term leg to go before consolidation occurs.
On the bullish side, we have rejected $7,800 with immense fervour, and this resembles just 10 months ago when Bitcoin was at $3,200 and everyone was waiting for $2,000. Don’t let this short term noise affect your core thesis. If you use dollar-cost averaging, continue without bias and you’ll thank yourself in the long term.
Without getting hopped up on hopium, Bitcoin taking out its current range and closing on the daily above $8,220 would be a bullish sign. Ideally, for the bear case to play out, we want a daily close below this region.
The region above (in green) is even more vital. In our opinion, this is the last point of resistance for the bear market. Breaking this would quite likely shatter our bear thesis and Bitcoin would have solidified itself at the bottom. A risky play like this is always enticing, but the risk-reward isn’t worth taking any kind of position right now.
Even if the bearish scenario plays out, we cannot see it smashing below $7,000. But this possibility absolutely cannot be ruled out because the first rule of crypto is to always anticipate panic selling i.e FOMO.
If Bitcoin was to take out its resistance at $8,960, we would be waiting for it to shoot above and consolidate near the same range before taking a long position.
Still holding tight to our expected consolidation region despite the bullish signs. One of the more coherent reasons we’re not convinced ETH is done correcting is because corrective moves of this type come in three legs. Two with the trend, and one away. We believe we are moving away from the trend and will finish with one more leg down.
In any case, a $200 resistance hit is very much possible, but as mentioned earlier, $184 could surprise a lot of bulls as a strong liquidity zone. Plotting liquidity zones is not just above resistance and support, it’s about volume.
ETH is still highly underpriced here and has been beaten down tremendously. Expecting the revival to be chaotically beautiful.
XRP also rejected a resistance for now, and a close above that would change our outlook. Unfortunately, XRP is horrible for short term trades due to the funky economic framework. But it is looking incredibly bullish; more so than BTC.
At this point, our sentiment would be that XRP rejects this area and falls to $.20 before consolidating. This is a region we, personally, would consider a spot position in XRP.
Ripple’s escrow release thesis didn’t play through, but it could at any moment. Knowing the company and the various exchanges working with them, they were waiting for an opportune moment – such as now – to unload the tokens into the open market
Keep an eye on XRP volume during this move. It has been significant and indicates a lot of bullish activity. It could very easily turn and sash through resistance towards the $.32 region.
Twitter and the rest of the market participants are currently too bullish for my liking. When things like this align, there is something much larger at play. The sudden change in sentiment to bullish is honestly what has me convinced that this market is going for one last leg down.
Just to reiterate one last time: this is not the time for directional biases. Sitting out of the market makes the most sense in this context. Entering positions in a haste and changing your sentiment in a snap can be counter-intuitive. Don’t allow such biases to overcome your mind.
The market has something big in store for us; if you get caught up with these small moves, you’ll miss the big picture.