Current BTC Assessment:
- Back in Dec 2021 we shifted bearish with aggressive downside targets of $18k based on historical top formation data applied to the 2021 top. Based on the historical structures I did expected some form of sustained relief rally in May 2022 but BTC remained under the 200MA. There are perhaps reasons for this including FTX.
- The market looks like it is in new territory and I believe BTC is setting a new path and I would be hesitant to accept any assessment that suggest this is the bottom based on BTC's history - Every Top and Bottom is different.
- TA still holds true. BTC seems to be respecting resistance levels and moving Averages + macro trend channels. This means that structure and order remains in the market.
- BTC seems to be stuck under the descending parallel channel (formed back in early 2021) and the weekly MAs. Limited bullish divergence developing.
- Equities are a at a pivot point with the Dow showing reasonable strength but resting on support.
- DXY looks in the zone for a major rally which is likely to have a negative effect on both equities and BTC.
Conclusions:
- A break back into this channel offers a viable & decent rally to $30k ($33k stretch) through 2023 before new shorts. Potential entries at $18,500 for 60%.
- A Break below $16k plunges BTC into the unknown. A catalyst for this might be the equity markets which show potential for further decline through early 2023.
Expectations:
The former feels more viable following a number of tests (4) on the descending channel floor. A rally to $30k will leave many still trapped while providing solid gains for sub $20k buyers.
Best, HF
Bearish scenario 1. Pretty accurate but now deviating from historical trends
Comment:
edging into the channel
Trade closed: target reached:
$30k target reached
