$BTC Market Update

Welcome to the first post on my weekly Newsletter where we post weekly talking about various markets which include: Crypto, Stocks, Forex, NFTs, and more…

$BTC Price Action

Bitcoin has been on a pretty heavy downtrend for the past 3-4 weeks, and it seems to have found a floor to stabilize at before a potential move down again. What I find interesting is that we have yet to see a higher wick on a weekly candle.

What does this mean? This means that there has been a lot of liquidity built up during this downward move, indicating the potential for a bounce.

If you take a look at the attached chart, you'll see that we are currently above a range. We experienced a double top where resistance formed, and we broke through that with an aggressive move to the upside. I believe we will eventually come down to retest this support (which was once resistance) at around 25.2k. If we don't hold that support, there's a good chance we'll touch the next range, which would be 22.2k. 

Overall, though, I don't think we will experience a straight fall down, giving the bears a free ride. I do believe we will have a green week coming shortly before that move down.

Taking a look at the Stoch RSI on the weekly timeframe, it also suggests that we may have reached a potential bottom for now within this range. However, it is unlikely that we will see a sudden surge back up towards 30k+. In my opinion, though, there is a possibility of a move higher towards 27.6k - 28k to create that higher week and seek liquidity.

Volume & Liquidity

On the recent upward move towards 30k for BTC and 2.1k for ETH, I've been discussing how that move didn't seem organic. But why does it make no sense?

I posted this ETH update discussing how the prices of both BTC and ETH were experiencing a rapid increase, but the overall volume was still on a downtrend. This indicates that the liquidity in the market is very low. Compared to the actual bull market, it takes a very small amount of liquidity to move the price of BTC, which, in my opinion, is quite bearish.

We saw the same thing play out before with volume decreasing and price action around March 2022, and we witnessed the consequences that followed. I'm not saying we're going to experience a major decline, but what I am saying is that there is no strong reason to be excessively bullish or bearish right now. It's better to think logically and understand that the current market may trap many people who believe we will see a rise back up. In reality, there is no justification for the market to break any higher timeframe structure and initiate a short-term bull run.

Conclusion

My main takeaway and the main point of this article is to highlight that BTC is currently in a precarious position. If you look at Crypto Twitter, you'll find an equal number of bears and bulls, which can deceive and confuse people into taking positions that may or may not work out.
 
My best advice is to practice patience and let the market come to you. In my opinion, two scenarios could play out:

1. We have found some support or a bottom, and we experience a push up to create a higher wick on the weekly timeframe, which would push the price to around 27.6k - 28k.

2. We consolidate for a few days and then head lower towards the top of the zone we broke out of for a retest, which would be around 25.2k.

I’m more in favor of scenario #1 which would trap the bulls thinking we are heading higher and we finally found support + also stop out a lot of bears that have been permanently shorting.

I hope the above content gives you a better understanding of the overall market, if you have any questions feel free to DM me on twitter @TheOnlyNotice!