This is just a quick update, since I don't have the time this week for something truly in-depth. Regardless of bearish news, this is still in line with what I was expecting for August - > September. In fact, I drew those faint yellow trajectories back in August. I did not think it would be easy for Bitcoin to break through the 46K+ resistance. Ironically, this is the test the market needs. If Bitcoin can hold this support despite the global economic situation, that would build a lot more confidence and resilience in the asset. If markets don't crash now, I still think there will be a massive deleveraging event. Evergrande may turn out to be nothing–––but once someone bigger goes down, that could be catastrophic. I'm still planning to reduce at least some more crypto risk over the coming months. Is now the right time to do it?
On the bearish side, if Bitcoin breaks back below the light blue trendline (broken downtrend) and fails to hold the purple, while confirming the 100 day MA (yellow) as resistance....I think we could see some new lows (red X). I think we'd need some more bad news for crypto and other markets for that to happen. From a technical standpoint, Bitcoin can bounce anywhere from here down to 35k (even if it's just a wick) and resume the uptrend. If Bitcoin bounces, I would prefer to see Bitcoin dominance rise–––as I mentioned recently, I still think there's a bit too much fluff in the altcoin market. If Bitcoin dominance rises, it shows positive sentiment returning to Bitcoin itself.
As for upside, if this level holds (with decent buyer volume), price can finally head towards ATH. I have targets at some long term trendlines (pink).
Time will tell! This is not financial advice. This is meant for speculation and entertainment only. This is not meant as a prediction. I am evaluating possible scenarios and explaining why events can unfold in either direction.
-Victor Cobra
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Now that price has bounced from the lows, we can observe a descending wedge/channel structure. 44k is the closest resistance, followed by $46-47k. If we break the local downtrend, Bitcoin can finally make a run for some new highs.
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The 50 week MA (red) is also important to hold as support for the bull market to stay "intact"
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The support outlined in this analysis ended up holding, and Bitcoin dominance has risen during the recovery to new local highs. This is generally a bullish sign in the crypto market. The sentiment for alts on Reddit has dropped considerably. Usually altcoin euphoria has me more concerned about an incoming market-wide crash. As long as Bitcoin can hold above $46-48k on any larger retrace, the bullish structure should remain intact.
I always look for your analysis when there is a big crypto market move. I appreciate your insight. Thanks.
Mihai_Iacob
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Let's see if is not just a correction
Tradersweekly
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Thanks for sharing. I think we will see more selling pressure in the coming days.
VictorCobra
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@Tradersweekly, Of course! Thanks for sharing your view as well. What makes you think we'll see more downside? The $40-42k zone is a really important level, and it can hold as support.
-Victor Cobra
Tradersweekly
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@VictorCobra, Bearish technicals in general. I think trend will continue.
VictorCobra
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@Tradersweekly, Which technicals? Spot buyer volume looks pretty good, and all indicators leave room for upside. The 100 day MA held as well. If Bitcoin can reclaim the 200, things will look more bullish. I can see both arguments. I think it all depends on the news and the narrative at this point. Does the Bitcoin narrative continue to hold up?
-Victor Cobra
Tradersweekly
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@VictorCobra, I am looking mainly on RSI, MACD and Stochastic (daily timeframe). All are bearish. Only RSI strives to reverse to the upside. But I discard that at the moment. I think that volatile moves by the market due to sudden changes in narrative are only reflection of how unsustainable this growth is. Cryptocurrencies are great speculative asset but besides that they are garbage.