Bitcoin (BTCUSD) (3-day/8-hour)
Bitcoin had a week marked with widespread fear starting with a heavy selloff last Monday, but ultimately ended up finishing strong last night.
Closing out the week with strength has primed the market for this morning’s break above $40k.
Tonight will close this current 3-day candle out, and bulls seem in control for the moment. On our 3-day chart, with a larger range, bulls must conquer the orange “neutral” box with a candle body above the $45k area to confirm. After 24 days of lower highs, the evidence for a serious reversal is strong.
Zooming in on the 8-hour chart, we’ve already passed our neutral zone, approaching the top of the range. Bulls still have the same challenge, even on the smaller range, to push past the mid $40ks if we are to see new highs.
The rampant fear and general sentiment shift from “up only” to “the bull run is over” that we saw across social media this past week was a contrarian’s evidence that we had bottomed with last Monday’s sell-offs. The strong finish over the weekend suggests that this could be the case.
New lows are still possible, but for now, it appears that bulls are on offense.
Ethereum (ETHUSD) (3-day/8-hour)
Ethereum has had some curious price action recently, particularly considering how bullish BTC has looked in the latter half of this past week.
As Bitcoin was gaining steam on Friday, Ethereum was being dragged down, and the heaviness seemed to carry over to the greater altcoin markets as well.
Bulls still have a ways to go on the macro levels to be in the clear, needing to reclaim the $3200 area, and ultimately $4000 before things seem “safe” again.
On our 8-hour chart, we still see ETHUSD hovering just at the top of our “neutral” orange box, and if that support fails, things could get ugly fast.
The disconnect between Bitcoin and alts is something we haven’t seen for quite some time, and Bitcoin Dominance shifting is further evidence of a change in focus from ETH/ALTS to BTC.
Fundamentals & Correlations
Although the Bitcoin Dominance (BTC.D) is still well below 51%, bouncing over from the 40% lows up to current 45% levels is a significant move. This is evidence of people dropping their alt bags for Bitcoin, at a rather alarming rate. This could mean the window for any alts outperforming Bitcoin has closed, and this is often something that we see before BTC makes an explosive move.
On Friday, we saw Bitcoin increasing in price as alts were getting destroyed across the board, and with the current bounce in BTC, we’re seeing very little relief comparatively across the alt market.
The US Dollar Currency index (DXY) remains more or less the same, hovering just around our diagonal resistance(formerly support). No real changes here, and no conclusions to be drawn from DXY at the moment.
Elon Musk is back in the “Crypto Twitter” zeitgeist with a recent tweet about Bitcoin Mining and Renewable energy, but it seems like his impact on these markets may be waning, with many people simply sick of his meddling.