BINANCEUS:BTCUSD
# Note: This is not financial advice, nor am I a financial advisor
Looking at some broad market conditions:
* Unwinding risk at EOY to close out gains at funds
* Massively over-valued market run for equities and crypto
* High levels of leverage across markets (dipping from crypto to equities and equities to crypto)
* Covid uncertainty
* Fed tapering
* Fed announcement of rate increases 3x in 2022
* Higher Volatility
* Failing to create a new higher high and a double-top back in Nov.
* Risk in Chinese real-estate markets (usually summated by "Evergrande" story...the Countrywide of 2021)
* Hedge Fund closures
* Risk to supply chain causing ripple effects to markets
* Inflation (ie. massive increases in money supply, which is loaned out at stupidly low rates)
* Continued and increased guidance around risk and leverage to institutional investors
Long positions in crypto started to take off right around the trough of the 2020 pandemic shutdown. As we've continued through the pandemic, broad markets have continued to go up in value along with PE multiples, inflation, and more recently volatility is at all time highs, along with all the major indexes. Since mid November, we've been seeing weakening buying power at the levels we're at. Investors and Funds, both, are trying to either reposition for a crash or they're trying to get out of positions to shore up P/L by End of Year (either to meet commitments to investors, set up the ideal tax scenarios, or wanting to offset losses on bad short positions).
BTC can be seen as more or less the index/guideline of the broader crypto markets as it has the largest valuation and marketcap of other coins AND most coins tend to directly follow movements of BTC. In the short term, it looks like there's sell pressure right around current levels, but a sustained increase above the resistance line (ie. close above the line and confirm the next candle above the line as breakout, there are additional upside risks ($50k barrier again, most of the SMAs aside from the 200-day SMA, which is offering support right now), and being below the Ichimoku cloud).
Also, we're trading in a bearish channel right now, which further supports the thesis that downside risk continues.
There is a lot of money from Wall Street being used to extend positions and make some quick cash to fill margin accounts, but it appears that the buying has worn off for a while. As they unwind positions and try to reduce their risk exposure with the traditionally crazy end of year cycle that funds work on (they get paid on Dec. 31 of each year), we're going to see continued decline through December, with maybe another upside rally before EOY, but should still fail to exceed significant resistance barriers. The key level to watch will be $50k, which is a key psychological barrier, along with other broad market indicators (inflation, QE, covid, interest rates, etc.).
Targets:
$45k next significant support
$38k-40k if above support fails
$30k if the call continues below the 38k buy zone
~$20k if the 30k zone doesn't hold everything off
I'm not short on BTC, but I'm looking to average in to BTC starting around $30k. If I had a net long position of BTC or WBTC (on an ETH blockchain), I would be taking up a small short position to play the swing down right now. I am doing this with ETH, however, but the price levels are different and that is a different position to discuss.
# Note: This is not financial advice, nor am I a financial advisor
Looking at some broad market conditions:
* Unwinding risk at EOY to close out gains at funds
* Massively over-valued market run for equities and crypto
* High levels of leverage across markets (dipping from crypto to equities and equities to crypto)
* Covid uncertainty
* Fed tapering
* Fed announcement of rate increases 3x in 2022
* Higher Volatility
* Failing to create a new higher high and a double-top back in Nov.
* Risk in Chinese real-estate markets (usually summated by "Evergrande" story...the Countrywide of 2021)
* Hedge Fund closures
* Risk to supply chain causing ripple effects to markets
* Inflation (ie. massive increases in money supply, which is loaned out at stupidly low rates)
* Continued and increased guidance around risk and leverage to institutional investors
Long positions in crypto started to take off right around the trough of the 2020 pandemic shutdown. As we've continued through the pandemic, broad markets have continued to go up in value along with PE multiples, inflation, and more recently volatility is at all time highs, along with all the major indexes. Since mid November, we've been seeing weakening buying power at the levels we're at. Investors and Funds, both, are trying to either reposition for a crash or they're trying to get out of positions to shore up P/L by End of Year (either to meet commitments to investors, set up the ideal tax scenarios, or wanting to offset losses on bad short positions).
BTC can be seen as more or less the index/guideline of the broader crypto markets as it has the largest valuation and marketcap of other coins AND most coins tend to directly follow movements of BTC. In the short term, it looks like there's sell pressure right around current levels, but a sustained increase above the resistance line (ie. close above the line and confirm the next candle above the line as breakout, there are additional upside risks ($50k barrier again, most of the SMAs aside from the 200-day SMA, which is offering support right now), and being below the Ichimoku cloud).
Also, we're trading in a bearish channel right now, which further supports the thesis that downside risk continues.
There is a lot of money from Wall Street being used to extend positions and make some quick cash to fill margin accounts, but it appears that the buying has worn off for a while. As they unwind positions and try to reduce their risk exposure with the traditionally crazy end of year cycle that funds work on (they get paid on Dec. 31 of each year), we're going to see continued decline through December, with maybe another upside rally before EOY, but should still fail to exceed significant resistance barriers. The key level to watch will be $50k, which is a key psychological barrier, along with other broad market indicators (inflation, QE, covid, interest rates, etc.).
Targets:
$45k next significant support
$38k-40k if above support fails
$30k if the call continues below the 38k buy zone
~$20k if the 30k zone doesn't hold everything off
I'm not short on BTC, but I'm looking to average in to BTC starting around $30k. If I had a net long position of BTC or WBTC (on an ETH blockchain), I would be taking up a small short position to play the swing down right now. I am doing this with ETH, however, but the price levels are different and that is a different position to discuss.