Bitcoin (BTCUSD) (3-day / 8-hour Comparison)
Bitcoin has been giving day traders a run for their money lately, with a lot of noise on lower time frame charts.
Crypto markets are particularly impatient since the participants are conditioned for high volatility and fast moves. However, Bitcoin and crypto, in general, has periods of consolidation which hurts retail traders the most. The expansion periods seem hyperbolic and fast-moving, but there is always a lengthier consolidation that precedes the larger moves.
We are seeing support show up on quick drops at exactly the right time, often near invalidation points, or even slightly below. It’s clearly resulting in confusion to anyone who doesn’t zoom out for clarity.
On the 3-day and 8-hour charts, we see levels previously marked off being respected on a closing basis, even if the 3D candles have some wicks slightly below. The closes and candle bodies are what really matter.
As long as these magical Fibonacci boxes hold, it’s possible that the bottom is in for King Corn. If they break, we will be looking at lower supports in the high $30ks-low $40ks.
We shall see, and we shall adapt.
Ethereum (ETHUSD) (3-day / 8-hour Comparison)
Ethereum found support at the critical $2192.53 level marked in red on the 3-day chart. This is essentially confirming the breakout to the upside, and all signs point towards further price discovery in that direction.
The 8-hour chart gives a little more color on the issue, as the current price is stuck at this resistance level just shy of $2500. Bulls likely need to achieve a candle close above the previous high to gain enough momentum to break free, but Bitcoin’s movement will still be a hidden factor that can influence & push the stalemate in either direction.
Fundamentals & Correlations
Again we will visit our favorite correlation charts – the Bitcoin Dominance chart (BTC.D) and the US dollar Index (DXY).
Both are more or less in the same spot as last week, with things looking like we are on the edge of a cliff and ready to dive deep into “altszn” like we haven’t seen in this cycle.
This looks imminent as of now, but these are often the situations where Bitcoin can come out of nowhere with a substantial move (up OR down) that can ruin what seemed obvious to come next.
With all this uncertainty, it is wise to be balanced (as always), and prepared to capitalize on any scenario. From a portfolio perspective, this would mean having diversification between different altcoins, blue-chips (BTC/ETH), and some spare USD/USDT on the sidelines in case we see a dip/buying opportunity.
It’s the boring answer that we already know to be true: don’t put all of your eggs in one basket, stay balanced, and be prepared for anything.