Looking at the above charts (Bitcoin and the total crypto market cap), I think it's time for the market to at least to attempt to make a reversal back to the upside. I'll remain fairly neutral until we get out of these downtrend channels, but what I really wanted to see was Bitcoin print a failure to break below the channel support, signaling seller exhaustion. That's exactly what happened today. We now have a fairly impressive bullish hammer forming for Bitcoin, and the total market cap is showing some impressive buy volume already on today's candle, as it's well back above the important $180B valuation. It's important to look at TOTAL2, where you can also see that this is the largest buy volume we've ever seen for alts, as they continue to hold a crucial support level:
What's also interesting about TOTAL2, is that you can see the failure to break ABOVE the uptrend channel from earlier this year caused a reversal to the downside. This is why I think this downtrend channel breakdown failure for Bitcoin could be the first sign of a bigger reversal. Again, this is perhaps the largest TRUE buying volume we've ever seen for the total crypto market cap, including alts. Just scroll back through the chart. The only days where we saw higher volume on the TOTAL chart were actually rejection candles, indicating that the majority of volume in those instances was actually SELL volume. On the Bitcoin chart, we can see that the most recent selloff occurred on LOWER volume than the descending triangle breakdown from September.
Bitcoin has also now successfully backtested the really important liquidity zone from May, when we had our first failure above $8K, only to dump quickly back towards $6.5K in a heartbeat. Not only that, but we most likely bounced today right off this pretty important trendline, as seen on the BLX chart:
What does all this tell us? I think the market could be trying to reverse back to the upside here. I made a bearish post about cryptocurrencies the other day, but that was mostly philosophical. Even though I may feel more skeptical, that doesn't mean prices can't make some massive reversals back to the upside. Our oscillators are also trying to bounce out of deeply oversold territory. The last time this happened, we were near bear market lows, roughly one year ago. Some people might have been expecting the pattern to repeat from last year. In some ways it has, but it would be wonderful for bulls if the lows for the market have already been set. I'm also seeing certain alts like VET and even NEO continuing to look fairly good, holding above important moving averages. But I'll save that for another post.
On the bearish side, we could still test some slightly lower levels. Another important liquidity zone exists between $6.1 and $6.3K. If that falls, Bitcoin can head all the way back to the 200 week moving average. But let's not get ahead of ourselves. On this chart, important near-term supports and resistances are marked, as well as prices where I can see us heading in the short term, upon a bullish breakout. In particular, I'm still eyeing the $500B level for the total market cap.
Time will tell whether or not a crypto bull market will finally begin. As I've been saying a lot recently, this still appears to be the very early stages of a potential bull market, or even still part of the bottoming process. Since we've broken the long term trends for TOTAl and TOTAL2, we should expect a lot of uncertainty and price discovery. But perhaps that is precisely what is needed. That's it from me! This is not financial advice. This is all purely speculative, and meant for both education and entertainment.
-Victor Cobra
Bitcoin has also now successfully backtested the really important liquidity zone from May, when we had our first failure above $8K, only to dump quickly back towards $6.5K in a heartbeat. Not only that, but we most likely bounced today right off this pretty important trendline, as seen on the BLX chart:
What does all this tell us? I think the market could be trying to reverse back to the upside here. I made a bearish post about cryptocurrencies the other day, but that was mostly philosophical. Even though I may feel more skeptical, that doesn't mean prices can't make some massive reversals back to the upside. Our oscillators are also trying to bounce out of deeply oversold territory. The last time this happened, we were near bear market lows, roughly one year ago. Some people might have been expecting the pattern to repeat from last year. In some ways it has, but it would be wonderful for bulls if the lows for the market have already been set. I'm also seeing certain alts like VET and even NEO continuing to look fairly good, holding above important moving averages. But I'll save that for another post.
On the bearish side, we could still test some slightly lower levels. Another important liquidity zone exists between $6.1 and $6.3K. If that falls, Bitcoin can head all the way back to the 200 week moving average. But let's not get ahead of ourselves. On this chart, important near-term supports and resistances are marked, as well as prices where I can see us heading in the short term, upon a bullish breakout. In particular, I'm still eyeing the $500B level for the total market cap.
Time will tell whether or not a crypto bull market will finally begin. As I've been saying a lot recently, this still appears to be the very early stages of a potential bull market, or even still part of the bottoming process. Since we've broken the long term trends for TOTAl and TOTAL2, we should expect a lot of uncertainty and price discovery. But perhaps that is precisely what is needed. That's it from me! This is not financial advice. This is all purely speculative, and meant for both education and entertainment.
-Victor Cobra
