Bitcoin (BTCUSD) (Weekly / 12-hour Comparison)
Bitcoin is looking strong on higher time frames, but let’s entertain the possibility of a short term bear case/final shakeout comparing opposing fibonacci retracement ranges. On the weekly chart (left), we see a nice reaction from the “continuation levels” (top green box- 0.322-0.382 retrace). A reaction at this retracement area rarely sees follow through beyond the “fakeout level” (-0.1, ~$65k here). The 12-hour chart (right) shows reversed fib ranges indicating that price is currently hitting resistances at the Optimal Trade Entry, or “OTE” which is 0.62-0.79.
What’s really interesting when comparing these two opposing ranges is the confluence between potential long entries and targets to close shorts. The “continuation levels” area for a long aligns perfectly with the “fakeout level” for a short, and the “Optimal Trade Entry” for a long aligns perfectly with these downside extension targets for a short. This confluence between opposing ranges can make predictions based on fibonacci retracements very effective. As always, be prepared for anything and stay frosty.
Ethereum (ETHUSD) (Weekly / 12-hour Comparison)
Ethereum has been mostly stagnant since it hit its $2,041 high on February 19th, and we see some similarities with BTC when comparing these timeframes and opposing fibonacci retracements side-by-side.
On the weekly chart, we see support stepped in perfectly at the “continuation levels”, and on the 12-hour chart, price is stalling at the “Optimal Trade Entry” Zone for a short.
The confluence between these two ranges are not quite as strong, but we do see alignment between the short “fake out level” and a retest of the recent low at the long “continuation levels”. If Bitcoin does see a shakeout, it’s likely that Ethereum would see a harsher one with stronger downward price movement.
Fundamentals & Correlations
Even though we are seeing a lot of calls for it all over social media, Bitcoin dominance is still much too high for an official “altszn” to commence. That being said, many alt coins have seen recent rallies, or appear to be on the brink of them. This BTC.D chart could suddenly enter the <51% area and just like that, everyone’s a genius.
The US Dollar Currency Index (DXY) is seeing what appears to be a short term bounce, which supports the short-term bear case for Bitcoin and Ethereum, as well as other assets priced in USD. The macro view still has the classical “double-top” pattern that suggests the downtrend will continue once this support falls out.