Bitcoin (BTCUSD) (3-day)
Bitcoin hit a new all-time-high past $60,000 last week, and the retrace so far looks healthy, with support stepping in at this previous resistance block (yellow line). Similar to how we saw the retrace from the $41,986.37 and support stepping in around the $30k area, this type of price action is healthy for potential continuation. The old McAfee “new paradigm” meme is now a reality – with organic spot demand from major players coupled with the decreased supply of mined coins since the halving last year, this market is truly in an entirely new type of cycle. It is hard to see much of a bear case when zooming out, but we still can’t rule out the potential for some lower supports to get tested if the recent lows don’t hold. Bulls would want to see price fall no lower than the previous $42k high; as long as that holds, it seems likely that we resume the “up only” market before too long.
Ethereum (ETHUSD) (3-day)
Ethereum has been surprisingly stagnant compared to BTC lately. ETH hit its $2000 level a few weeks back and still has not reclaimed that level. If you believe in the “buy the laggard” strategy, then ETH could possibly be the horse to bet on in the short term to outpace BTC. If ETH does gain some momentum, that should be a good sign for the overall altcoin market – typically ETH will lead altcoins, with ETHBTC being a reliable index of sorts for the overall altcoin market. Bulls need to see a higher timeframe candle close above the previous high for confirmation, and it seems pretty likely that they will get it.
Fundamentals & Correlations
“I dream of alt-season” – We’ve seen calls for an incoming “altszn” hit a fever pitch on social media over the past couple of months, and of course, the market has kept traders waiting in vain. The BTC dominance chart still looks ready to give us the conditions we need (~<51% market share for BTC). There is almost no question that the capital flowing into Bitcoin right now will make its way into altcoins, it’s just a matter of when. Looking at the US Dollar index (DXY), we see a show of support just before a level that could lead to free fall. The short-term reversal could mean a decline in USD-priced assets (stocks, crypto), but the macro view still paints a classical double top pattern, indicative of a long-term downtrend on the horizon.