Bitcoin (BTCUSD) (5-day/1-day)
Bitcoin is in dire straits with a harsh rejection from our orange “neutral” zone on the 5-day chart. If bulls can’t pull a miracle off and get us back above $42.3k before tonight’s close, we are looking at a possible bottom below $30k, in the $25-28k range.
Zooming in slightly to our daily range, the ask from bulls seems a bit more feasible: just close the day above $39.2k and maybe there’s a chance to rally.
Equities markets have contributed to the lower timeframe bearish price action as we start the week. There is a contrarian case to be made for crypto- with so much bearish sentiment and leveraged short open interest, there is the possibility that we could see a major rally kicked off with a short squeeze type of move. If we were to get a squeeze above $44k, that could be enough to propel us towards the mid $50ks. There is also the simple fact that the week has opened with a sell-off in all markets, and opening moves on higher timeframe candles can often be misleading “fakeouts.”
Ethereum (ETHUSD) (5-day/1-day)
Ethereum’s looking pretty bearish on our 5-day range, with sub-$2k targets looking very plausible. If bulls can save this candle and get back above $3k before tonight’s close, that would be a significant victory. Without that, it seems like $1635-$1900 is the next likely support, below that, $1312-1450.
Fundamentals & Correlations (Weekly)
No new developments in Bitcoin dominance (BTC.D) but the US Dollar Index (DXY) seems to keep pushing towards the highs we saw in March 2020’s “Covid Crash.” This last leg to get there could be just the catalyst that crypto bears need to hit some of their low targets. Catching a knife before DXY tops could be very dangerous, proceed with caution.