TECHNICAL OUTLOOK
Overall, we anticipate a short-term bearish market trend for Bitcoin, with a potential bearish bias before a potential upward movement, likely occurring towards the end of 2023.
Below, I present the key point of interest, where I would consider initiating long or short trades based on the prevailing market conditions at that time.
Additionally, the chart below illustrates the potential reactions that can be expected at said point.
Once the price reaches this area, I will employ a combination of the RSI indicator to assess market momentum, and the Lorentzian classification algorithm to determine entry points. While it is evident that the market will already be bearish at that stage, I prefer to witness a pullback after the price closes below the trendline before entering a bearish trade. This pullback could range from a retracement of 20% to 100%. Within this range, I will be prepared to initiate a short position once the specified conditions are met, relying on a sell signal generated by the aforementioned indicators or any other technical confirmation.
For a more accurate assessment, let us shift our focus to the 4-hour timeframe. Here, we observe that we are presently within a bearish channel. However, I anticipate a temporary retracement to the upside before resuming the downward movement. This expectation is supported by the fact that we are approaching slightly oversold conditions on the daily timeframe. Nevertheless, it is important to note that I maintain an overall bearish outlook on this timeframe as well. I emphasize my predictions accordingly.
Additionally, it is worth noting the presence of a significant wick on the 4-hour timeframe originating from the downside. This particular region could potentially serve as a point of rejection, contributing to the current market conditions we are experiencing.
If you are looking to trade the pullback this would be a good time to go long once he 4H candle closes and the oscillators are still oversold on the 4H timeframes.
As far as technical sentiment goes across all indicators we can see that we have a number of indicator showing a bearish trend however the oscillators are mostly neutral. Which is a good sign meaning that there is still room for the market to push down without any retracements.
FUNDUMENTAL OUTLOOK
Based on the most recent fundamentals above I conclude the following below.
🔹Bearish Sentiment:
Declining Active Wallets: The number of active Bitcoin wallets, both for sending and receiving funds, has been decreasing significantly since mid-April. This trend suggests a decline in user activity and may indicate that rising fees associated with Bitcoin transactions are discouraging users from engaging with the network.
Rising Fees: The hype surrounding BTC NFTs and BRC-20s has contributed to increasing fees for interacting with the Bitcoin network. Higher fees can deter users from conducting transactions and lead to a decrease in overall network activity.
🔹Bullish Sentiment:
Increased Transactions: The number of daily Bitcoin transactions has grown by 89% from mid-April to mid-May, indicating a surge in activity. This growth can be attributed to the recent BRC-20 craze and the implementation of native solutions for NFTs and issuable tokens on the Bitcoin network.
Weakening Correlation with Ethereum: Bitcoin's correlation with Ethereum, the second-largest cryptocurrency, has reached its weakest point since two years ago. This suggests that the price movements of Bitcoin and Ethereum are becoming increasingly non-correlated. Some analysts interpret this as investors considering Ethereum an emerging market after its transition to PoS, while Bitcoin is seen as a hedge asset.
Overall, the analysis suggests a mixed sentiment for Bitcoin. While increased transaction activity and the weakening correlation with Ethereum may indicate some bullish factors, the decline in active wallets and rising fees contribute to a bearish sentiment. It is important to consider additional market factors and conduct further analysis to make a more comprehensive assessment.
Overall, we anticipate a short-term bearish market trend for Bitcoin, with a potential bearish bias before a potential upward movement, likely occurring towards the end of 2023.
Below, I present the key point of interest, where I would consider initiating long or short trades based on the prevailing market conditions at that time.
Additionally, the chart below illustrates the potential reactions that can be expected at said point.
Once the price reaches this area, I will employ a combination of the RSI indicator to assess market momentum, and the Lorentzian classification algorithm to determine entry points. While it is evident that the market will already be bearish at that stage, I prefer to witness a pullback after the price closes below the trendline before entering a bearish trade. This pullback could range from a retracement of 20% to 100%. Within this range, I will be prepared to initiate a short position once the specified conditions are met, relying on a sell signal generated by the aforementioned indicators or any other technical confirmation.
For a more accurate assessment, let us shift our focus to the 4-hour timeframe. Here, we observe that we are presently within a bearish channel. However, I anticipate a temporary retracement to the upside before resuming the downward movement. This expectation is supported by the fact that we are approaching slightly oversold conditions on the daily timeframe. Nevertheless, it is important to note that I maintain an overall bearish outlook on this timeframe as well. I emphasize my predictions accordingly.
If you are looking to trade the pullback this would be a good time to go long once he 4H candle closes and the oscillators are still oversold on the 4H timeframes.
As far as technical sentiment goes across all indicators we can see that we have a number of indicator showing a bearish trend however the oscillators are mostly neutral. Which is a good sign meaning that there is still room for the market to push down without any retracements.
FUNDUMENTAL OUTLOOK
Based on the most recent fundamentals above I conclude the following below.
🔹Bearish Sentiment:
Declining Active Wallets: The number of active Bitcoin wallets, both for sending and receiving funds, has been decreasing significantly since mid-April. This trend suggests a decline in user activity and may indicate that rising fees associated with Bitcoin transactions are discouraging users from engaging with the network.
Rising Fees: The hype surrounding BTC NFTs and BRC-20s has contributed to increasing fees for interacting with the Bitcoin network. Higher fees can deter users from conducting transactions and lead to a decrease in overall network activity.
🔹Bullish Sentiment:
Increased Transactions: The number of daily Bitcoin transactions has grown by 89% from mid-April to mid-May, indicating a surge in activity. This growth can be attributed to the recent BRC-20 craze and the implementation of native solutions for NFTs and issuable tokens on the Bitcoin network.
Weakening Correlation with Ethereum: Bitcoin's correlation with Ethereum, the second-largest cryptocurrency, has reached its weakest point since two years ago. This suggests that the price movements of Bitcoin and Ethereum are becoming increasingly non-correlated. Some analysts interpret this as investors considering Ethereum an emerging market after its transition to PoS, while Bitcoin is seen as a hedge asset.
Overall, the analysis suggests a mixed sentiment for Bitcoin. While increased transaction activity and the weakening correlation with Ethereum may indicate some bullish factors, the decline in active wallets and rising fees contribute to a bearish sentiment. It is important to consider additional market factors and conduct further analysis to make a more comprehensive assessment.
Comment:
I will update this markup throughout the year
Comment:
End of week review
As my markup anticipated we are getting that 4H rejection as predicted. And I am still expecting price to pullback further into 27000 levels before continuing back to the downside
But so far price is reacting as expected
As my markup anticipated we are getting that 4H rejection as predicted. And I am still expecting price to pullback further into 27000 levels before continuing back to the downside
Comment:
We have pulled back even more as predicted previously. At this point I am expecting price to melt down to Daily levels. Now would be a good time to start seeking sells. I would wait for a sell signal from the ALGO. Because it is still slightly possible for a push to te other zone above the correct shown below. However so far so good.
Comment:
Price has pushed hight to the zone above as stated before was possible however now price is overbought and is prime to fall. At this point I am not expecting price to go any higher and I expect price to now push down to our buying area
Comment:
BTC is still consolidating but has not pushed any higher. I still stand behind me sentiment that I dont expect the price to push above those highs formed and it should melt. Due to the consolidation from at the moment as seen in the image above if and when price starts to come down if support is found on either of the support levels I will seek a early buy entry before instead of waiting for price to push all the way down to my initial buy target.
BTC is still consolidating but has not pushed any higher. I still stand behind me sentiment that I dont expect the price to push above those highs formed and it should melt. Due to the consolidation from at the moment as seen in the image above if and when price starts to come down if support is found on either of the support levels I will seek a early buy entry before instead of waiting for price to push all the way down to my initial buy target.
Comment:
BTC is now in one of our points of interest where we might take a buy if we get a buy signal. If not I will still wait for price to push down to the other daily level to get filled on buys
Comment:
Having strong bullish reaction before getting to my zone. Going to watch for a pull back before entering long
Trade active:
Trade closed: stop reached
C Nicholas Downie
