Phi-Deltalytics

BTC Weekly Outlook (FA&TA)

Long
COINBASE:BTCUSD   Bitcoin / U.S. Dollar
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Key Fundamentals:

1. Smart money action:
The on-chain smart money actions are now stable at a bullish level. This is similar to the on-chain developments before prior bull runs. Institutional investors showed picked up interest in the crypto space as Grayscale raised $900M in Q2 (its ATH quarter since inception). The $900M won’t be available for exiting until at least October 1st this year. And small likelihood that this group will exit at all. (Thanks to NxjaUNHaCucnyxaB’s insightful comment last week.)

2. Miner action:
Both hash rate and difficulty have recovered , and miner capitulation has ended. With miner capitulation historically marking market bottoms, this is a bullish long-term sign.

3. Market Sentiment:
Overall market sentiment is now neutral to overly bearish . For the seller group sentiment, this group remains in a bull trend, but the current price has already slightly dropped below the actively trading group’s purchase price. This means a decrease in willingness to sell, leading to a decrease in supply, which will ultimately increase price. Assuming bull market, we are in the golden accumulation zone. (Note: The R:R for betting trend changes simply doesn’t appeal to me. Yes, you can bet it every time and never miss a large movement, but you also need to deal with the 30-40% win rate and high operational/execution risks.)

4. Margin & Futures Market Actions:
A ridiculous amount of longs were present at the 11.5k level, and a "likely long squeeze alert" appeared before the drop to 10k. Currently, the margin market is overly bearish , but not enough people is on board with the “bearishness” so we do need the open interest to pick up a bit to fuel an ideal short squeeze. As for the CME institutional traders’ positions, last week’s drop doesn’t impact this group turning bullish after 3 months of indecisiveness. The position is for futures , and thus acts as a leading indicator rather than a coincident indicator. Check out the March resemblance.

5. Global Market Impacts:
To ease the COVID impacts, the Fed is using all means to boost the economy, which means a continued rise in inflation . This will fundamentally push up the value of gold , bringing up bitcoin along the way as the main value proposition of bitcoin remains store of value rather than remittance.

6. CME Gap
90% of historical BTC CME gaps get filled sooner or later (generally created by weekend BTC movements when the CME’s closed). Yes, we still have a $300 gap open on 7/25 from 9.6k to 9.9k. However, after such a long time, the gap filling (big if here) will be more of a result of general market movements rather than the cause.

Key Technicals:

1. Resistance at 11.3k. Support at 9.8-9.9k (If we drop below this level, trend will likely turn bearish ).
2. Elliot wave: likely in wave (ii) of III. Wave (ii) currently counted as a zigzag and is potentially finished.
3. RSI neutral to bearish:
Failing the RSI MAs and in a bearish trend . However, for the short-term, an upward attempt at the MAs is needed. Meaning I'm leaning bullish for the week ahead.
4. MACD bearish:
In bearish trend . No sign of up-cross yet.

Do you agree or disagree? All thoughts and critics are welcomed!
Comment: Not sure what's wrong with the scaling. The red underlined text is meant to be "worth a long, preferably after the open interest/value picks up".
Comment: Price now close to the active trader group’s purchase price. These have been good accumulation opportunities historically as the reluctance to sell with no profit in a bull market eventually will push up the price level.
Comment: Bull run emotional cycle: depression, disbelief, hope, optimism, belief, excitement, thrill, greed, euphoria. Which phase do you think we are in? My pick is disbelief.
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Comments

Nice chart. Thank for sharing. Your idea is similar with my case 2.
+2 Reply
Trading-Guru LuckyTrader102
@LuckyTrader102, I'll also share my chart here, I have a similar idea but focused on a slightly smaller time frame:
Reply
Phi-Deltalytics Trading-Guru
@Trading-Guru, nice heads-up!
Reply
Phi-Deltalytics Phi-Deltalytics
@Phi-Deltalytics, always good to be patient on trading.
Agree that there is more likelihood for BTC to break through 10.5k than to drop below 9.8k.
Any thoughts on the CME gap at 9.6k?
Reply
alienteck Phi-Deltalytics
Did you check the DXY levels? It filled the gap on the first drop itself.. Since the contracts closed they already booked the loss and the Chinese most likely who had the open position took the money and ran knowing the CME would try to get their money back.. Maybe why open interest dropped by half.. BTC1!*DXY,,, Also the DeFi locked BTC tokens 40k got liquidated and 1.5mil ETH also got pulled and now back to old levels.. Who is left to sell?
Reply
@alienteck, not many left... mostly retail selling for now. I would scalp long once ftx and huobi gets more overly bearish.
Reply
alienteck Phi-Deltalytics
Also the game plan might have changed since no one expected the sushi guy would deflate the DeFi market so suddenly and fully over the weekend.. $1.5 bil gone..
Reply
Phi-Deltalytics LuckyTrader102
@LuckyTrader102, thanks for sharing!!
Reply
Agree with everything, but leaving out the possibility of another go at that CME gap. I myself called it a runaway gap, many times, but being so close to it, now, presents a tempting target. If Tuesday, for any reason, the NYSE as so much as sneezes, it could even overshoot 9600. Not saying it will happen, but can't ignore it's possible. As for Aesthetics, i like your charts, just the way they are, i apreciate you taking that extra effort to put in as much info as you can, but if some folks find it a bit overwhelming, a compromise would be posting the same chart in JPEG , below, so folks can zoom in and out as needed.
+1 Reply
@AJFG, I'm definitely debating this. How many people do you think actually read the descriptions? Generally, I try to put the key info in the chart.
+2 Reply
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