Overall the chart is still bullish for BTC but there are some things we should be paying attention to here after a few days of blood in the streets.
This last Friday looks like there was nearly 1B in liquidations that fed the fire and with thinner orderbooks, another half a billion in liquidations yesterday that fueled the fire. We saw Alts take a significant beating with each leg of the BTC pull back which is pretty standard and why you should always pay attention to BTC even for trading Alts. That information came from coinglass.
BTC had put together a wedge as it consolidated and it was favoring the top of the wedge which many times indicates it will break up instead of down, however, unfortunately, we see it broke down instead of breaking out. BTC's fall was caught by support on what was the top of the previous channel, prior resistance converted to support. This is actually a very common pattern that after breaking out of a channel an asset will come back down and confirm the prior resistance as support, then resume its run up. Based on that very common occurrence it could be construed that the current chart is business as usual and still bullish.
If we break that support, if we go lower than our low from yesterday, it will be more likely we convert that prior resistance back into resistance and head back to the bottom of our previous channel, which still was a nicely ascending channel, and would not be catastrophic but it would mean an ~$51k BTC. Of course if we lost that support its BTC to the $24k's and essentially this run is over. As you see by the chant we are in a large multi-year channel that had us running until around $80k/$81k and I would expect us to test that resistance again but we weren't far from it already. Of course if we break out of that, the sky is pretty much the limit.
BTC Dominance:
We made it right to the top of resistance for BTC Dominance yesterday, now we will either see it pull back down which would likely be pretty beneficial for alts or it will break out here. If it breaks out, it means one of two things, either a parabolic BTC that runs hard and leaves the alts in its dust or a plunging BTC that causes Alts to plunge even harder, like the last couple of days.
Coinmarketflow I also like to watch the global MDR (Market Depth Ratio) which is the difference between combined bids and asks, when it goes green the market is over sold and the further negative it runs the more the market is overbought. That isnt really the sentiment it conveys directly its probably more along the lines for fear and greed but ultimately it is still a great indicator for over bought and oversold. We are at around a -5 MDR and rising on global order books at 100% market depth, that means we are nearing a positive MDR and thus, over sold territory.
Sadly many of the Alts I am watching broke through their support lines and look like they could fall quite a bit more while a few have managed to hold their supportive ascending trendlines but cant take much more beating without giving them up.
So this is a lot of text to say this could be a great entry point or we still have some nasty surprises in place, so if you are putting yourself in long positions now it could be very rewarding but be vigilant, if BTC breaks yesterdays lows, watch for that $51kish and likely its a great place for (re)entry.
Dont forget, as always, do your own research. This is just additional information for you to consider that might help you in your path of due diligence. This is not investment advice.
This last Friday looks like there was nearly 1B in liquidations that fed the fire and with thinner orderbooks, another half a billion in liquidations yesterday that fueled the fire. We saw Alts take a significant beating with each leg of the BTC pull back which is pretty standard and why you should always pay attention to BTC even for trading Alts. That information came from coinglass.
BTC had put together a wedge as it consolidated and it was favoring the top of the wedge which many times indicates it will break up instead of down, however, unfortunately, we see it broke down instead of breaking out. BTC's fall was caught by support on what was the top of the previous channel, prior resistance converted to support. This is actually a very common pattern that after breaking out of a channel an asset will come back down and confirm the prior resistance as support, then resume its run up. Based on that very common occurrence it could be construed that the current chart is business as usual and still bullish.
If we break that support, if we go lower than our low from yesterday, it will be more likely we convert that prior resistance back into resistance and head back to the bottom of our previous channel, which still was a nicely ascending channel, and would not be catastrophic but it would mean an ~$51k BTC. Of course if we lost that support its BTC to the $24k's and essentially this run is over. As you see by the chant we are in a large multi-year channel that had us running until around $80k/$81k and I would expect us to test that resistance again but we weren't far from it already. Of course if we break out of that, the sky is pretty much the limit.
BTC Dominance:
We made it right to the top of resistance for BTC Dominance yesterday, now we will either see it pull back down which would likely be pretty beneficial for alts or it will break out here. If it breaks out, it means one of two things, either a parabolic BTC that runs hard and leaves the alts in its dust or a plunging BTC that causes Alts to plunge even harder, like the last couple of days.
Coinmarketflow I also like to watch the global MDR (Market Depth Ratio) which is the difference between combined bids and asks, when it goes green the market is over sold and the further negative it runs the more the market is overbought. That isnt really the sentiment it conveys directly its probably more along the lines for fear and greed but ultimately it is still a great indicator for over bought and oversold. We are at around a -5 MDR and rising on global order books at 100% market depth, that means we are nearing a positive MDR and thus, over sold territory.
Sadly many of the Alts I am watching broke through their support lines and look like they could fall quite a bit more while a few have managed to hold their supportive ascending trendlines but cant take much more beating without giving them up.
So this is a lot of text to say this could be a great entry point or we still have some nasty surprises in place, so if you are putting yourself in long positions now it could be very rewarding but be vigilant, if BTC breaks yesterdays lows, watch for that $51kish and likely its a great place for (re)entry.
Dont forget, as always, do your own research. This is just additional information for you to consider that might help you in your path of due diligence. This is not investment advice.