In the last piece I wrote I tried to cover a more general and long term perspective of the Crypto market, warning against FOMO buying and emptying out your life savings but rather trying to highlight a more responsible approach to this wildly erratic phenomenon that we all want to get our grubby paws on. Well, I hope you paid some attention because since the time of that post and very shortly after it was posted, Bitcoin plummeted from around the $14 000 mark to around $9000, having recovered slightly and now hovering around the $12 000 mark.
So, what do you see? Too much volatility or opportunities to buy the dips and build your portfolio, I’ll leave that up to you.
Bitcoin dominance in the market currently sits at 68.4%, a massive increase since last week when it sat around the 64-65% region. On the daily time frame we can see clear bullish momentum, a nice clean push past the last significant lower high (A) around the $11 000 mark followed by a huge rejection of the area of interest (B).
Having still not seen any sort of noteworthy pullback after the past couple days of bullish rallying, the general feeling is that a revisit of the $9000 – $10 000 (C) region is still very much on the cards. My view is that if we can get a successful retest of this area without breaking to the downside the market will gear up for another leg higher towards the yearly highs of $13 800 (D).
In my opinion, the bulls we’re looking for aren’t back just yet, but once we get a clear break and retest of the zone marked (D), hold on for dear life.
Using textbook top down analysis, we now take a look at the 4-hour chart, pulling a fib retracement from the recent swing high to swing low paints the picture and bias here much clearer. As you can see, we have a precision wick rejection off the 78.6 fib retracement, watching price action around the green box (A), $11 800 – $11 500, and the movement around the ascending trend line is the next step. The confluences are clear here – should price action behave. A break of the trend line would coincide perfectly with a break of the 61.8 fib retracement and would support the soon due pullback to (C), from our daily chart, where big retail and possibly, institutional money would step in sending dear Bitcoin on it’s next leg higher – hopefully waving that red flag on the way.
