6 Weeks ago BTC traded above the Weekly 50SMA (yellow dotted line) but at that time the 21 Week SMA (blue dotted line) was higher than it is now and sellers won that fight. Nevertheless, If BTC starts trading above the Weekly 21SMA, we may start the next leg up. If not, we remain Bearish for short and mid-term.
As we know, BTC produced a very strong impulsive move from 3k to 14k but it doesn’t mean it will not go below 6k again. In fact we don’t have much support below 6.3k and revisiting 6.9k can be the catalyst needed for another crash to 5k. Nothing is granted but we already saw a strong dump when BTC broke down the 3Day 200SMA and something similar can happen again.
The only way to avoid that would be holding above 7.4/7.5k and finally pumping well above 8.1k. 9.5k/10.3k is the next resistance, if we retest that level and confirm support near 8k we may be over with this wave 2 but almost everything is suggesting the opposite. We should expect more lows, eventually another crash (capitulation) liquidating over-leveraged traders/investors. Don’t be one of them.
While BTC is pushing higher, breaking the previous resistance (near 7.5k) alts keep dumping. ETHBTC is only 5% above the last low (achieved in September 2019) and we don’t know what will happen next. Many expect BTC to pump but honestly we need more than this to be optimistic. BTC clearly needs to show strength holding above 7.5k and breaking 8.5k. If it doesn’t happen 5k remains our next target.
else is also struggling or even achieving new lows. BTC is failing to stay
above the 50Week SMA and the most likely scenario under this conditions is
visiting the 200Week SMA (at the moment near 5k).
For any Bullish scenario BTC should stay above 6.9k and it also needs to close the month above 7.5k.
If we consider Alts Market Dominance we still need to push more than this to be excited. Sooner or later Alts will start a consistent Bull Run like BTC is doing but meanwhile we need more Bullish price action than what we saw. What I want to highlight is the fact that Alts Mkt. Dominance tested the Weekly 21 SMA and dipped to the 9SMA. If Alts remain above the 9 Week SMA and even push above the 21 Week SMA everything may start moving much faster but until it happens they can keep lagging.
BTC achieved an even stronger bounce than what would be expected. When we have such moves it’s better to wait some days or even weeks before taking anything for sure. A small example why can be seen on the next chart. Since the market structure is different I’m obviously not expecting the same reaction nor new lows but testing some previous resistances as support (before more pumps) is still a possibility.
Nevertheless instead of focusing on the short term let’s see what this mean for mid and long term using Multiple Time Frames. First of all this pump puts BTC above the 200 Day SMA, quite relevant Support in Bull Markets. As we already know we dipped below for one month and it could mean something worse than it seems to be (nothing granted yet because we need to remain above this MA but don’t forget the Halving in May 2020).
Using the 3Day chart we see how this pump wasn’t random, the strength of the reaction is always unknown but when the Market starts a new Cycle (Bullish one) BTC tends to retest the 3D 200SMA and it may happen again in the next weeks or months (we can’t be sure yet – or ever, nothing is granted). What BTC needs for confirmations is to stay above this two moving averages (in this time frame).
Using weekly and monthly charts we also have confirmations for a Bull Market continuation but we also see that it may happen faster or slower depending of the next days/weeks. BTC doesn’t have to pump to 20k in few days (like some already speculate) and it doesn’t have to go lower… patience is key.
For more than half of this year I was ignoring the Total Market Cap because BTC is completely in control since April/May 2019. Alts did nothing relevant or impressive in this period and they may not do anything interesting while BTC is under 10k. Nevertheless Total Market Cap is showing us exactly why BTC and Alts may start pushing higher from this level.
First of all, we should consider a false breadown of the Weekly 50SMA (current support for almost one month) but a breakdown of this Moving Average may be the trigger for another major leg up. We don’t have to go lower but we need a trigger to push higher. That trigger usually comes in form of price action and volume. Something that we lack at the moment but who knows when and why it will come. Another reason to start moving higher is just because Bears may have lost control and fuel to push price lower. If no one is interested in selling lower than price will hold and bounce at some point without any particular reason.
One thing we can be sure, 200B Market Cap represents a confluence of supports and no one should be expecting another breakdown like the previous. History never repeats exactly in the same way because we don’t have the same market structure and conditions. What we currently have is a reversal from the Bearish trend formed in 2018 and a nice pullback from the last high (near 400B), we remain in Bearish territory (for short term) until we push above 230B Market Cap. The white line in this Weekly Chart is the 9 Week SMA and it usually works like a short term trend, if price gets above we can expect another leg up but if we remain under this line then another low is possible and even expectable (eventually around 170B market cap, but it may not happen).
Alts may be ready to start another major move. We waited enough to be confidant on what is going on and we only need confirmations from now on. First confirmation for a major move is breaking up the Daily 50SMA (yellow) and the second confirmation is breaking up the Daily 200SMA (red). Meanwhile we can do another low depending on what BTC is about to do.
Be ready we may end the Year with some crazy price action (or not, no one knows for sure).
Since the Weekly MACD is cooling down and eventually reversing in the next weeks don’t be surprised with more Bullish price action, even if we have some resistances to break before pushing above 10k.
I’m still waiting to see 7K tested (something between 6.8k and 7.4k to be more accurate), nevertheless breaking the 12H 50SMA (yellow) may prevent another low. As example let’s compare what BTC did when it found support near 3K.