Lumber is finding support finally after losing nearly 70% of its value in eight weeks. A breakdown beneath the 200-week moving average could mean pain for the broader economy. The last times a long-term lumber trend stayed under the 200-week moving average was the 2006-2009 financial crisis period and the 2016 bear market for stocks.
Despite the pop today, BTC still hasn't broken through the resistance necessary to transition into a support zone. Be careful until the SMA(200) or SMA(20) hold. Keep an eye on the 4-hour chart for emerging trends.
BTC is still channel-bound on the daily chart. The channel lines up nicely with the SMA(20) and EMA(21), which are also common points of resistance in a bear market.
If it doesn't break through the channel soon, there is little hope of returning to a bull market in the near term.
If a breakout is going to happen, it will happen here first. Then the breakout flows through to the longer timeframes.
It seems like four hours is about the sweet spot for BTC. Long enough not to get faked out, but short enough to react quickly.
While we can't guess what comes next for BTC, we can notice the resistance / support zone from Jan 2021 is being tested again.
A break above the zone would be positive, but if the trend breaks below the range, there may not be support again until $20k.
This is a good day to wait and see.
Looking for potential support if BTC breaks down beneath the $40k level, which happens to coincide with previous support and the SMA(200). That should be strong support and with luck will be the end of the bleeding, but given the speed of the move, we have to be thinking about what may come next should the support fail.
The next recent support level was around...
Another bad sign for the BTC market. We'll see what happens at close today, but this level is especially close to the SMA(150) on the daily chart.
When I see trends being broken on the longer timeframe, that is further cause for concern.
We'll see what happens in the next few hours.
Notice that the SMAs have reconciled to their normal uptrend position in the hourly charts.
Watch for the SMA(20) to cross under the SMA(50) as a cue for a reversal to the downside.
Look for continuation of the nascent uptrend if this pattern spreads to the 2-hour, 4-hour and daily charts.