Another messy weekend of price action for these Cryptos…
We sound like a broken record at this point, but 30,000 for Bitcoin is the level to watch right now.
This weekend’s low was now the 5th time buyers defended this critical level of support:
Expert technical analysis of financial markets by JC Parets
by Louis Sykes
Another messy weekend of price action for these Cryptos…
We sound like a broken record at this point, but 30,000 for Bitcoin is the level to watch right now.
This weekend’s low was now the 5th time buyers defended this critical level of support:
by Louis Sykes
Following Bitcoin’s bounce back these last few days after some sustained selling, there’s plenty of failed breakdowns out there in the Crypto space right now.
Frequent readers of ours know just how much we love these setups:
In essence, when price undercuts its former lows, stop losses get hit, and longs throw in the towel. At the same time, bears heavily jump in and enter short.
Then as the market begins to rally back above those former lows, shorts are now underwater, and they’re forced to cover. While they’re buying back their positions to unwind the trade, longs see price on a tear higher and fold into buying back their old position. Momentum traders see these gains and jump on the bandwagon too, forcing even more shorts to cover.
Long story short, it creates a positive feedback loop that can propel price significantly higher.
It’s why we love this pattern so much around here.
Looking through our Chartbooks today, we couldn’t help but recognize a lot of these patterns in Crypto right now, and it’s not just Bitcoin.
by Louis Sykes
In every major asset class, there are typically a handful of indices to help drive our decisions from the top-down.
Whether we’re looking at the US Dollar Index, the CRB, the Nasdaq, or any other variety of ETFs, these help form the basis for identifying leaders, laggards, and assessing the overall market.
The same applies to Crypto.
The only problem is, there’s a painful lack of diversified indices to look at in the first place; S&P Dow Jones indices launched a Mega-Cap Crypto index in May, which only tracks Ethereum and Bitcoin, and MSCI is currently eyeing launching indexes of their own. [Read more…]
by JC
There is a special purity in the crypto markets that is absolutely fascinating to technicians like us.
It’s a supply and demand game to the ultimate extreme. There are no fundamentals. There are no earnings. It’s just fear and greed, no government intervention, just humans being humans.
It’s pretty awesome.
I’ve noticed sentiment is getting pretty extreme down here and the risk vs reward opportunity here is to the upside.
30,000 has been an important level in Bitcoin going back to the prior up cycle. This was our first target after completing that multi-year base: [Read more…]
by Louis Sykes
It turns out that “Diamond Hands” and “HODL” are not real strategies.
This weekend’s action only just reinforces the hot mess this asset class finds itself in.
And it’s not just Bitcoin and Ethereum.
Downside participation is really beginning to ramp up under the surface.
Many of these tight ranges we’ve been discussing these last few weeks seriously broke down this weekend.
Behind the scenes, the weight of the evidence is shifting more and more to the bear camp.
by Louis Sykes
It’s sure been messy out there.
There just hasn’t been too much to discuss in recent weeks – volatility’s contracted, and any signs of momentum have just fizzled out.
But that’s not to say that there are NO opportunities; it just simply means they’re harder to come by, and the probabilities of success have lowered significantly.
Despite all this messy action, we’ve still had a handful of trades really go our way on both the long and short sides. Buying the leaders, and selling the laggards – despite how oversimplified it may sound – is as prudent of a strategy in this environment as any other.
by Louis Sykes
Humans are hardwired to find patterns where they don’t exist.
Back in the day, it was beneficial for our ancestors to picture predators hiding among the leaves, even when they really weren’t there. This Pareidolia kept them safe. Thousands of years on, it makes us terribly susceptible to chart crimes.
One such crime plaguing the Crypto landscape is this idea that “Bitcoin is correlated.”
People argue that these digital assets are having a real consequence on the macro environment.
But the reality is that Bitcoin is far too small a market to have any intermarket relationships at all.
by Louis Sykes
These crazy Bitcoin “HODL’ers” and “Laser Eyes” people must be going nuts right now.
Apart from a few exceptions in shorter time frames, there’s been a painful lack of real opportunities floating around in this space recently, both on the long and short sides.
Breakouts are failing, and breakdowns aren’t doing much either.
Legendary trader Paul Tudor Jones once said that “Markets only trend about 15% of the time, the rest of the time they move sideways.”
As aggressive as trends can be in Crypto, we need to respect that markets simply need to repair their damages and reload for the next move.