We're about an hour away from the weekly close and recent price action has made me shift towards a short-term bearish bias. Let's jump to the charts to see why.
The weekly chart, though it hasn't closed yet, does not look promising to me. $9,600 was a critical level and I was quite bullish above it, even with the rejection wick above $10,000. But Bitcoin has clearly lost that level and it would take a miracle for that to change in the next hour. Furthermore, unless BTC can rally to $9,500 or so this candle, which could have been a bullish inside bar, now looks quite bearish. Simply put, I don't think Bitcoin is ready to break the range to the topside despite monthly support holding. I'm guessing the range low get re-tested after that topside wick and potentially the weekly support down near $8,500 is tested for the third time.
Let's not also ignore that wick to the topside comes off another higher low and the weekly downtrend line. If I'm looking for a long-term play to carry us above $10,000 I'm looking for a clear higher low on the weekly. We had our ultimate low at $3,100, our higher low around $5,400 and now I'm looking for another higher low if I'm truly going all in. Where that higher low occurs though is hard to say and there's nothing to say Bitcoin can't go as low as $6,000 and still be bullish. The $8,500 level has been tapped several times already so if we don't think it goes any lower that implies the higher low is in. Do I think that? No, not particularly - it's too shallow of a retrace for a run up this high especially given the context of the weekly downtrend rejection. Let's jump over to the daily for a closer look.
Before I jump into the higher low I was talking about, I just want to point out this level from $9,150-9,300 has been critical going back a very long time. If the daily manages to hold above it, there's nothing to say we don't see Bitcoin make a move up to $9,800 or so. However, you can see we also lost the uptrend line from the lows which doesn't paint a pretty picture. That being said, weekly and monthly support are intact and I can't fully commit to a bearish bias until those are lost.
If they are lost, what's next? First thing is the range lows in the vicinity of $8,500-8,600 which also closely aligns with weekly support and the 200 day moving average. Likely huge lines of defense for BTC and I expect to at least see a sizeable bounce here if nothing else. But if those are also lost, we start to get into the question of where a higher low might form. I've marked out 3 levels on the chart:
$7,800-7,900 lies untested daily support and a .382 fib
$7,250-7,350 is again another untested support and close to the 0.5 fib
$6,400-$6,600 marks an untested low and closing in on the golden pocket of .618-0.65 fib region
If we make our way down to these areas I intend to play them. That likely means I open a levered position anticipating a bounce while also opening a spot long as a dollar cost average mechanism subject to invalidation. The only scenario that would make me outright bearish on Bitcoin's future is a a lower low on the weekly and loss of that range low, so below $6,000 I begin to be concerned but anything $6,000-7,800 is a clear dip buying opportunity for the longer term.
Ethereum, despite also being rejected by a significant downtrend, looks more bullish than Bitcoin to me. Context also matters here with Alts showing signs of life for the first time in years and DeFi being a major area of focus. I definitely want to build a long term spot position in the coming weeks.
The daily uptrend is still largely intact, as is weekly support but given the weakness shown by Bitcoin I'm not sure this holds. It's certainly safer to long if the downtrend and this range break to the upside, otherwise I'd start to build longer term longs sub-$200 and I'm happy to dollar cost average down to $150 if needed. The long-term outlook of Ethereum and it's relatively proximity to the lows looks quite attractive.
I'm as bullish on altcoins as I've been since probably late 2017. That being said, we're riding the recent BTC dominance uptrend here and it's yet to set the lower low I'm looking for as an altseason trigger - this won't occur until a loss of 64% or even more ideally 62% which would break the long term uptrend line. I'm still in a few altcoins but took healthy profits on several earlier today. Watch this for the breakdown if you want to ride a real alt cycle.
As always, I'm trading BTC on Bybit which remains the undisputed best option for trading Bitcoin with leverage in my opinion. They are currently offering up to $90 bonus for new sign-ups so if you want to learn more you can also read my full review of Bybit. For altcoins I trade primarily on Binance, the extent of features and altcoin offerings can't be beat. I also named it the best cryptocurrency exchange overall if you want to read more.
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