TL;DR back to indecision – and fear.
At the time of writing, bitcoin is trading around the $3,720 mark, following a fall of around $100 yesterday.
The fakeout above $4k last weekend and subsequent plunge has rattled the markets, and pessimism has once again descended on bitcoin. The mood is turning sour, and crypto as a whole is suffering. Many alts have been posting double-digit red figures, as they give up gains in BTC terms and BTC gives up its dollar gains.
On the bitcoin chart, the 50 and 100 daily moving averages are now close, having flattened out in the last few weeks, and could cross soon. Price is currently above both MAs. This is all theoretically bullish, but it doesn’t feel like it at this point. The 200 DMA is still way up around $5k. Meanwhile, RSI on the one day is pretty neutral, around 50, and trending down. The recent fall has reminded us just how fragile the current situation is, and how fast things can change – for the better, and for the worse.
What is really telling is the flip in sentiment over the last couple of weeks. On the recent move above $4,000, Crypto Twitter was in full cry, declaring the bottom was in. That level couldn’t hold, and the abrupt crash back down below $4,000 and now to $3,700 has shown it was a lower high. We have yet to make a lower low, so at the moment BTC is still being squeezed between those two converging lines: the downward-sloping line of lower highs, and the upward-sloping line of higher lows. Resolution of that triangle is on the way, and for now, the direction of least resistance is down.
At the moment, there’s support at $3,600, and of course at the 200 weekly MA, which currently stands at $3,400. Then there’s the local low of $3,100, which represents the bottom for this cycle.
In terms of the fundamentals, there’s plenty of good stuff going on, but most of the big projects that could catalyse the next rally – Bakkt, the ETF, and so on – have gone quiet for now. No doubt their return will coincide with a confirmed uptrend for BTC.
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