Bitcoin (BTCUSD) (2-week/1-day)
Bitcoin has been struggling to gain traction so far this month so far, with a brief rally to $48k that now looks like it has failed.
Looking at our 2-week chart, with a simple zoomed out range, the rejection at the midline does not bode well for bulls. Without a Higher High on a high timeframe close, retesting the range lows seems highly likely.
Zooming in a bit to our daily chart, we can see a confirmed retracement from the 0.79 level of our bear fib range. Bulls could save this by stepping in from $36-$38k with potential to break through the $53k area of resistance. If they can pull this off, we could see targets north of $55k in play again. For now, bears appear to be in control, with a potential bounce area around $28k aligning with the bottom of our 2-week range.
Ethereum (ETHUSD) (1-day)
Ethereum looks a bit less clear when looking at the action around our fib ranges on the daily chart. ETH seems somewhat in limbo, yet to tap our larger ranges “Optimal Trade Entry” levels, on both the long and short side. Given the shape of Bitcoin, it seems like the long side “OTE” is more likely to hit first, giving us a potential bounce at either the $2500 area or the $1700 area- both targeting a rally to the $4k area for another short opportunity. Bears appear in control with ETH pretty much until a $4k breakout or a new ATH is hit.
Fundamentals & Correlations (Weekly)
Bitcoin dominance (BTC.D) remains flat in the low 40%’s, which has given alts a chance to move somewhat independently, but there just doesn’t seem to be much interest or liquidity, no doubt in part influenced by similar problems in equities markets.
The US Dollar Index (DXY) has been on a tear recently, giving a lot of resistance to any rallies we’ve seen in both legacy and crypto markets. That being said, it is approaching some long term resistance levels that have been market bottom signals, a rejection at current 100 level could signal a rally in BTC/Crypto/Legacy prices, but a move past 100 to March 2020’s high of 102 could bring quite a bit more pain before we see a real recovery.
