Has Bitcoin topped or is this just another correction?
Bitcoin has been looking fairly weak recently and is slowly breaking all key trends, while on lower timeframes it has formed a downtrend. Bounces are weak, support is turning into resistance and funding has refused to go negative and keeps rising, while we'd want to see it go negative. The weird thing is that funding has been relatively low for quite some time, but hasn't printed any negative numbers yet. Most alts are also with positive funding although not too high that would make me think a crash is coming. Lots of charts down below!
BTCUSD essentially had a major SFP at the top this time around, with a gap up on a Sunday. This week it started with almost no gap, but it had fallen substantially and the downturn countinued. The previous time we go a major gap up it was at the Feb top and markets crashed, but this time it was smoother. On the RSI it is clear we've had significant divergence across all timeframes and the weekly looks scary. In my opinion the market needs to bottom asap if it hasn't already. Until I see a close above 60k I am very cautious.
50-52k seems to be a good support combo, but getting there would mean the structure has broken. So far BTC has bottomed at the CME breakout zone and after sweeping the double bottom at 53k and right at the diagonal which connects the previous key local bottoms. That's a pretty good place for a bottom given that most expect 50-52k to come. Maybe waiting for the 50 DMA or something like it. In my opinion the 50 DMA won't hold if it gets touched. Yes initially it could bounce, but the bottom at 29k was a bit lucky. The whole GME/WSB saga at the time + Tesla buying + it was horizontal support along with several other stuff like the S2F 463DMA model. This time around we are way more overbought and we have some serious issues on the traditional markets about which I am going to analyze soon.
You see alts have been pumping for some time, but not all together. Since Feb 5th, a certain sector of the market topped and then it was mostly certain themes / coins that were pumping. Now many look not so great, although the majority I'd say is still overall bullish. Still lots of opportunities, but I can't decide whether coins Like Polkadot have been in distribution for all this time and are ready to collapse, or re-accumulation and ready to pump. Nothing is very clear, but truth be told I see more bearish stuff than bullish. We rallied too fast too soon. This rally was driven by lockdowns, the digital boom, the gambling boom, easy money and so on. Maybe it was rushed... Even though there is literally nothing telling me that was the macro top, if everything else turns bad then how will crypto avoid the initial mess? Bitcoin has left some major gaps / untested levels from 43k and lower, so I wouldn't be surprised if the whole thing flops.
I need to make it very clear: Bitcoin and Crypto have lots going for them. More adoption, more printing and so on... However the reality is that there are too many issues that haven't been solved in the global financial system and these could have a temporary negative impact on the market. Everything is fragile for reasons I've explained before and on detail on my twitter/telegram channel. So if the dollar starts going up a lot, which is quite likely at this point... Then I can't see how Bitcoin won't feel the heat. Stocks have now closed below their 50 DMA, while the USD has clearly broken above its 50 DMA and both are clearly trending up for a few days now. Oil no good, VIX too supressed and could pop violently, NDX was already below the 50 DMA and so on. This definitely isn't an ideal situation given that the Fed is already doing a significant amount of QE and the 1.9T relief bill got passed. Maybe it was the SLR adjustment, maybe the inflation scare, maybe the rising yields that affects portfolio construction, maybe we had a buy the rumour - sell the news, maybe the reopenings/vaccinations/stimulus are the end of the election/vaccine/stimulus trade that started in November and ended in March.
In terms of the supply side (people selling bitcoins), I think we are far from over. Same goes from the demand side as there are constantly new onramps... but what if we get a demand shock and that goes down due to the USD pumping. Maybe waiting for an ETF has put a lot of close ended funds like GBTC under pressure as there are no new entrants and premiums have gone negative. Maybe people are anticipating regulators to go after big exchanges like Binance. These things are playing a role, but what is clear is that we got really high really fast, longs are still quite a lot more than shorts. Again no indicator is showing that this is the macro top, but I don't think this is a normal bull market and that we will see something similar to the previous ones. They were more quite and the markets less volatile. Now we have tons of changes and the market has grown a lot and anything can happen. I still expect 150-250k this year, but this doesn't mean we could go to 40k first. A close above 60k would really make my worries go away and hopefully Bitcoin starts going up with the USD rather than the USD being a problem for BTC. A catalyst like an ETF this year would be quite big and could essentially create that situation.
BTCUSD essentially had a major SFP at the top this time around, with a gap up on a Sunday. This week it started with almost no gap, but it had fallen substantially and the downturn countinued. The previous time we go a major gap up it was at the Feb top and markets crashed, but this time it was smoother. On the RSI it is clear we've had significant divergence across all timeframes and the weekly looks scary. In my opinion the market needs to bottom asap if it hasn't already. Until I see a close above 60k I am very cautious.
50-52k seems to be a good support combo, but getting there would mean the structure has broken. So far BTC has bottomed at the CME breakout zone and after sweeping the double bottom at 53k and right at the diagonal which connects the previous key local bottoms. That's a pretty good place for a bottom given that most expect 50-52k to come. Maybe waiting for the 50 DMA or something like it. In my opinion the 50 DMA won't hold if it gets touched. Yes initially it could bounce, but the bottom at 29k was a bit lucky. The whole GME/WSB saga at the time + Tesla buying + it was horizontal support along with several other stuff like the S2F 463DMA model. This time around we are way more overbought and we have some serious issues on the traditional markets about which I am going to analyze soon.
You see alts have been pumping for some time, but not all together. Since Feb 5th, a certain sector of the market topped and then it was mostly certain themes / coins that were pumping. Now many look not so great, although the majority I'd say is still overall bullish. Still lots of opportunities, but I can't decide whether coins Like Polkadot have been in distribution for all this time and are ready to collapse, or re-accumulation and ready to pump. Nothing is very clear, but truth be told I see more bearish stuff than bullish. We rallied too fast too soon. This rally was driven by lockdowns, the digital boom, the gambling boom, easy money and so on. Maybe it was rushed... Even though there is literally nothing telling me that was the macro top, if everything else turns bad then how will crypto avoid the initial mess? Bitcoin has left some major gaps / untested levels from 43k and lower, so I wouldn't be surprised if the whole thing flops.
I need to make it very clear: Bitcoin and Crypto have lots going for them. More adoption, more printing and so on... However the reality is that there are too many issues that haven't been solved in the global financial system and these could have a temporary negative impact on the market. Everything is fragile for reasons I've explained before and on detail on my twitter/telegram channel. So if the dollar starts going up a lot, which is quite likely at this point... Then I can't see how Bitcoin won't feel the heat. Stocks have now closed below their 50 DMA, while the USD has clearly broken above its 50 DMA and both are clearly trending up for a few days now. Oil no good, VIX too supressed and could pop violently, NDX was already below the 50 DMA and so on. This definitely isn't an ideal situation given that the Fed is already doing a significant amount of QE and the 1.9T relief bill got passed. Maybe it was the SLR adjustment, maybe the inflation scare, maybe the rising yields that affects portfolio construction, maybe we had a buy the rumour - sell the news, maybe the reopenings/vaccinations/stimulus are the end of the election/vaccine/stimulus trade that started in November and ended in March.
In terms of the supply side (people selling bitcoins), I think we are far from over. Same goes from the demand side as there are constantly new onramps... but what if we get a demand shock and that goes down due to the USD pumping. Maybe waiting for an ETF has put a lot of close ended funds like GBTC under pressure as there are no new entrants and premiums have gone negative. Maybe people are anticipating regulators to go after big exchanges like Binance. These things are playing a role, but what is clear is that we got really high really fast, longs are still quite a lot more than shorts. Again no indicator is showing that this is the macro top, but I don't think this is a normal bull market and that we will see something similar to the previous ones. They were more quite and the markets less volatile. Now we have tons of changes and the market has grown a lot and anything can happen. I still expect 150-250k this year, but this doesn't mean we could go to 40k first. A close above 60k would really make my worries go away and hopefully Bitcoin starts going up with the USD rather than the USD being a problem for BTC. A catalyst like an ETF this year would be quite big and could essentially create that situation.
A few alts held well, but ETH is looking incredibly weak... Bitcoin dominance is still holding while alts keep rotating and I have nothing really special or concrete yet as for what is going there, other than many look incredibly weak. If Ethereum looks so weak and has broken down, then I can't expect much. So until we get a close above 58500 be cautious.