Market Overview + Technical Analysis #3
Content:
Market Overview-
The Current State of the Market ($BTC)
What to Expect Next? ($BTC)
Technical Analysis Review-
$ICP Technical Analysis
$ROSE Technical Analysis
TOTAL + Dominance Review
Closing Thoughts
Market Overview-
The Current State of the Market ($BTC)
At the time of writing this Bitcoin is trending at $18,246 as it re-enter a highly anticipate range that may have come off a local low*. This range has bore a lot of traders to death as the volatility has stabilized for the past month, but just today we FINALLY got a move. This move has definitely caught my eye for the simple reason that we have re-entered a long-range similar to past cycles. Could it be possible, the recent range low could have been a deviation that set the bottom? Whatever the answer to that is, those who are sidelined will get trapped on either side if you buy with emotions. Those who stay have watched my latest BTC Monthly Analysis know that I have shifted my bias because of the FTX Collapse which caused a break of the 19k level. So long as we hold the range lows I believe the market will trend higher as explained in the recent BTC Monthly Analysis. The market moves in waves so we have to also pay attention to the fundamental factors at play. Currently, Bitcoin’s hash rate has hit an all-time high AGAIN and finally, the price of Bitcoin has risen along with it. The other beautiful thing to watch out for is how BTC addresses holding 1,10,100 Bitcoin as they are approaching all-time highs. On the contrary, addresses holding 1000 Bitcoins hit a 3-year low. Are whales rotating into altcoins?
Figure A
2. What to Expect Next ($BTC)
Currently, Bitcoin has been ranging after setting a low. It is best to wait for a reclaim of the range low before getting euphoric. We will also look at $TOTAL and Dominance to better gauge the market as it might give us hints on what we can expect next. For now, Bitcoin has just broken back into the range after the FTX collapse set the low at 15.5k. The reason why that low may be a bottom is for the simple fact that stops have been taken from the lows and the range has been re-entered. This is important because in Figure A there are multiple ranges across all bottoms on a macro level. Another thing to note is that in this range there is a lot of untapped liquidity at 21.4k, 22.8k, and 25.4k. I will be watching as we rise, as the follow-through of this move is extremely crucial to maintain bullish momentum.
A Bearish Scenario*
I don’t think it's impossible to put in a new low that would sweep out traders. The real question is, are the whales done flushing out all the little players, or are they going to drive up liquidity to 25k and then take them back down to the range low? This is something to think about because while I am bullish I am not blind to another scenario playing out. This is why paying attention to $TOTAL and Dominance may help put the pieces together.
Figure B
Technical Analysis Review-
$ICP Technical Analysis
At the time of writing this $ICP trades at $4.51. The chart used below is from Coinbase as it displays the full price action of $ICP for this technical review. To preface this I want to disclose that I shared my thoughts on $ICP on December 10th last year. In the technical analysis section, I covered that one should remain patient until more confirmation is provided unless you wished to dollar cost average. Since then, we have trended sideways and haven’t had much volatility. However, this is starting to change* if you look at current price action because the (8)EMA, RSI, and Price Action are turning to the upside. If 4.68 is reclaimed, then it is possible to see the price go higher to the 9$ range*.
Figure C
2. $ROSE Technical Analysis
At the time of writing this $ROSE trades at $.42 cents. The chart used below is from Tradingview as it displays the full price action of $ROSE for this technical review. To preface this I want to disclose that I shared my thoughts on $ROSE on November 4th last year. In the technical analysis section, I covered that one should remain patient until more confirmation is provided unless you wished to dollar cost average. Since then, we have only trended downwards and are falling under a big historical support region(red box). This is not the best-looking chart after seeing this breakdown occur. It is best to wait for this red box to be reclaimed before getting bullish again unless you would like an aggressive entry. It is best to be patient unless your strategy is dollar-cost averaging*.
Figure D
TOTAL + Dominance Review
TOTAL REVIEW
After sharing my thoughts on $BTC and a few $ALTS, I think it's important to also discuss the rest of the market and where I think we are headed.* As I have covered on my YouTube channel I am expecting an (s)alt season to occur as most wouldn’t expect that. Yes, I said this two months ago, but things take time, and $ALTS are finally moving. A lot of altcoins are bouncing heavily at critical support levels while others are breaking through them. It is really important to distinguish $ALTS that have room to run versus the opposite. Nonetheless, if you look at the TOTAL chart below you will see that it is in a gorgeous range. If we can reclaim the 1.13 trillion dollar mark then the whole market has potentially* bottomed. This is something that I am anticipating as the market moves up to gauge whether or not things are becoming macro-bullish. Right now, we are getting subtle hints of hopium.
DOMINANCE REVIEW
In the below chart, you will see a dominance chart that displays the sum of ETH.D+BTC.D. This sum does a great job displaying when ALT season takes place. If you look closely, we can see that in 2021 there was a clear loss of dominance as ALTS outperform $BTC and $ETH dramatically. Additionally, we see that we are currently seeing the chart at resistance(red shaded box) accordingly. Currently, this chart is taking forever to play out but nothing has really changed. If the dominance is not reclaimed, then most likely one of two things play out. 1) Alts bounce harder than BTC & ETH like a dead-cat bounce before dominance reclaims highs. 2) We witness an explosive ALT season that most people completely don’t expect. In either scenario, one may assume it's better to be in strong ALTS versus ETH and BTC for the mid-term.
Closing Thoughts
The question everyone has is, is the bottom in? Let me make it very easy for you…Unless you know a market maker who has unlimited money to make a bottom, then no one can confidently answer that question. However, when you look at all the data presented, comparing the last cycles, and using pattern recognition we try to paint a picture. The picture looks like $BTC is getting ready to continue confusing more people on the direction. After a year of downward price action in 2022, BTC looks like it set a local low and may start running upwards*. Remember, the market is going to keep tricking people by moving in waves usually leaving people to act out of emotions. This is why establishing your plan ahead of investing, understanding your time horizon, strategy, and understanding risks are quintessential to succeeding. By just having a proper plan, one is ahead of 90% of other investors. With that, I thank you for reading and reminding you that none of this is financial advice!
