PREFACE: In our last TA we noted a monthly pattern that continues to hold true since December- week 4 the pattern flips bullish, week 2 the pattern flips bearish and we correct. This appears true for April into May as well; the strong correction in April actually matched the February correction almost exactly- the same fractals, the same percent of correction and the same trend angle. Impressive work by whales/MM, or maybe its indicative of some common bot behaviors?
CURRENT SITUATION: Bitcoin came out swinging today. It still closed it's first monthly red candle of this bull run, but I consider that bullish since most of the old heads here were growing nervous not seeing a little red there. In my opinion March was a heavy accumulation period for industry and whales. When BTC pushed over 60k they stopped accumulating and retail lacked the volume to climb higher. The weak retail volume coupled with the suspicious flash dump overwhelmed bulls who couldn't hold 60k and we found Bitcoin revisiting upper 40s. This drop led the fear index to it's highest point in this cycle, and the highest level observed since the COVID19 black swan crash in 2020. But this is a good and long overdue correction that appears to have again set the stage for another possible bullish breakout!
WHAT IS NEXT: Well I can't lie- I feel bullish right now.
1.) Bear Scenario: if this is a fakeout or prelude to another consolidation period similar to March, I still expect a few days of bull but we would probably see a drop and retest of the support around 53-54k and consolidation through May. I don't expect a deep correction at this time. If we fall below 53k, I'd look for an opportunity to retest 49/50k, or the 20/21W SMA/EMA which I expect us to retest in the coming months anyways.
2.) Bull Scenario: Statstically the first week of May should remain bullish and we paint another ~2 weeks of green with a couple red days scattered in there. I don't have a target for the top of this wave, I'll wait to see how we retest 60-65k. Starting the second week you need to pay close attention to the market and look for the possibility of a correction. The 14th of May would be that 18th day of bull we discussed above, which statistically (reference above or my previous TA) is the most likely day for a reversal and start of a correction. A weak correction would retest support at 53k support; heavy correction will meet the 20/21W SMA/EMA.
CURRENT SITUATION: Bitcoin came out swinging today. It still closed it's first monthly red candle of this bull run, but I consider that bullish since most of the old heads here were growing nervous not seeing a little red there. In my opinion March was a heavy accumulation period for industry and whales. When BTC pushed over 60k they stopped accumulating and retail lacked the volume to climb higher. The weak retail volume coupled with the suspicious flash dump overwhelmed bulls who couldn't hold 60k and we found Bitcoin revisiting upper 40s. This drop led the fear index to it's highest point in this cycle, and the highest level observed since the COVID19 black swan crash in 2020. But this is a good and long overdue correction that appears to have again set the stage for another possible bullish breakout!
- Volume doesn't look explosive, but it is at it's highest level since February, and also matches early January- we are seeing bulls out in moderate strength. This is a healthy sign since volume was declining for months, despite weakly rising prices.
- We finally closed over the 20 and 50D EMA for the first time in almost 2 weeks! Feels good to be back.
- Stoch RSI is entering oversold territory for the 5th time since December. Each time this happened we averaged 15 days REMAININGof bull before a proper correction. The single outlier is the 4 days of bull in March before we entered a forced consolidation/reaccumulation by the MM/whales; if we discount that, our average would be 18 days of bull remain before a proper correction. This aligns with our monthly historical trend of week 2 corrections.
- MACD crossed over bullish on the day chart for the first time in several weeks (finally!) and for the 5th time since December (monthly cycle right?) This usually happens in the first 25-50% of the bull pattern.
- The trend angle for this breakout sits at 61 degrees so far, with its closest comparison being the 57 degrees in March, which followed an almost mirror image correction from what we saw in April. If this holds we will likely plateau quickly for a consolidation before another leg up, or we will hit a local top and begin correcting soon.
- Gan Fan has us very bullish at the month, flirting with the top of the 1/2
- We saw a healthy retracement on the 27/28th of around 45% before springing from low 52k.
- Candles on the 28th and 29th wicked lower but the bodies closed with a low in the low 53k range, which aligns with the bottom of the value area we previously established at this price range. For the purposes of this bullish breakout, I consider this the bottom support.
WHAT IS NEXT: Well I can't lie- I feel bullish right now.
1.) Bear Scenario: if this is a fakeout or prelude to another consolidation period similar to March, I still expect a few days of bull but we would probably see a drop and retest of the support around 53-54k and consolidation through May. I don't expect a deep correction at this time. If we fall below 53k, I'd look for an opportunity to retest 49/50k, or the 20/21W SMA/EMA which I expect us to retest in the coming months anyways.
2.) Bull Scenario: Statstically the first week of May should remain bullish and we paint another ~2 weeks of green with a couple red days scattered in there. I don't have a target for the top of this wave, I'll wait to see how we retest 60-65k. Starting the second week you need to pay close attention to the market and look for the possibility of a correction. The 14th of May would be that 18th day of bull we discussed above, which statistically (reference above or my previous TA) is the most likely day for a reversal and start of a correction. A weak correction would retest support at 53k support; heavy correction will meet the 20/21W SMA/EMA.