BTC Bulls be careful...
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We’re approaching an interesting area for BTC and if the crypto market responds to BTC in the same way that FX responds to DXY, we could be at an inflection for cryptos as well.
The break of 40k in BTC was always going to be the signal to head towards 50-55k area and whilst I’m a long term bull, there are too many technical reasons for BTC to move lower at the moment (which OF COURSE, is not a guarantee that it will).
Here are a few reason why BTC bulls need to be cautious
Re-distribution from ATH
We hit 64,854 in April and started the move to the downside with a lower low created in May. If the sell-off is going to continue, it’s likely that re-distribution will take place in and around the current area thereby creating another lower high.
Daily Divergence
Both RSI and Stochastic Indicators are showing Divergence on the daily timeframe. The market continues to go higher while both indicators suggest that momentum is switching to the downside (divergence).
Imbalanced Market
Market is top heavy at the moment with key areas of imbalance below. Technical analysts will refer to these areas as GAPS and can be seen in blue on the chart. The area around 32k – 37k needs to be filled, and potentially even lower to 20k levels. BTC bears can see 12k as a possibility.
Important to remember that the right price doesn’t necessarily mean the right time, and to buy here you’d need to see a close above 60k which would act as confirmation that the price wants to go higher. So this might become an area of value in the future but represents a high risk buy right now.
The break of 40k in BTC was always going to be the signal to head towards 50-55k area and whilst I’m a long term bull, there are too many technical reasons for BTC to move lower at the moment (which OF COURSE, is not a guarantee that it will).
Here are a few reason why BTC bulls need to be cautious
Re-distribution from ATH
We hit 64,854 in April and started the move to the downside with a lower low created in May. If the sell-off is going to continue, it’s likely that re-distribution will take place in and around the current area thereby creating another lower high.
Daily Divergence
Both RSI and Stochastic Indicators are showing Divergence on the daily timeframe. The market continues to go higher while both indicators suggest that momentum is switching to the downside (divergence).
Imbalanced Market
Market is top heavy at the moment with key areas of imbalance below. Technical analysts will refer to these areas as GAPS and can be seen in blue on the chart. The area around 32k – 37k needs to be filled, and potentially even lower to 20k levels. BTC bears can see 12k as a possibility.
Important to remember that the right price doesn’t necessarily mean the right time, and to buy here you’d need to see a close above 60k which would act as confirmation that the price wants to go higher. So this might become an area of value in the future but represents a high risk buy right now.
Nota
Took a nice buy from 41k into the current Area of Interest and watching for signs of distribution here. A close outside the daily Range (i.e. above 60k area) will invalidate this idea....
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