We can finally use that word for its intended purposes: support levels have been broken Bitcoin is down 10. However, some cryptos are holding up a little better than their counterparts. We were specifically looking at the pump up and the trap to be avoided. We thought it would go up a little more than just one day but hence this is crypto and liquidity events take place. Let’s have a look at why this is happening, what we can do moving forward and the potential major significant low still looking to come into the market this year in 2022. The hope of all this is that we’re getting closer to that significant low that turning point where all of the bulls have been killed the bears are in control. Then we have to flip back into the bullish state. The only time we can get back to a bull state is once all the bulls have been killed. Everyone is bearish then the market flips the exact same happens at the tops. This is just part of market psychology. I’m doing my best to slaughter the bulls on Twitter.
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We’re still tracking at these low prices these low levels of 20 to 30 in the fear and greed plan so the market sentiment is still pretty crazy now. We’re always taking a look at this because we can see the market get pumped up. Don’t forget that end of March where you had all the Permabulls. The perma ethereum holders the influences talking up merged to the Ethereum 2.0 never forget these things and on-chain data. I mean I personally have thrown that out the window a long time ago. The reason being is – I don’t want more analysis. I don’t want more indicators, I want less and I want to use the stuff that works and, of course, the stuff that works for me. It might not work for you.
The news headlines Luna foundation guard further bolstered stable coin reserve by raising 1.5 billion in Bitcoin. Surprise! They’ve bought it over the last few days, mind you, which was in a tweet from Dokwan this morning worth of Bitcoin over the last few days. This was a bitcoin price of 38 to 40-ish thousand dollars and, of course, now. We find ourselves at around 36 000 at the time of this recording so I’ve just got a little joke you know where every time we see this sort of post whether it’s Luna whether it’s Michael Saylor whether it’s El Salvador whether it’s some sort of big institution buying generally not always it tends to be at a time just before a dump. Why is that honestly I think it has something to do with the market psychology when things are up.
It’s hap people are happier to talk about it when things are down. You know no one really wants to say that they’re buying Bitcoin because, obviously, the markets can go a little lower, and for your opium. This is your opium if things do go lower the risk-reward gets a lot better over the long term. I’m looking at 100-200 000 for Bitcoin. So, if we do get bitcoin at 20 or 30 000 those returns to the upside are much greater than buying Bitcoin when all of the hype and the greed is in the market at fifty or sixty thousand and, recently, we saw that greed or that neutral field come back at around forty-eight thousand dollars and, of course. The returns just get a lot less market drops down and we rinse and repeat now as to why this has happened. Yesterday, we had the news from the fed that they raised the interest rate.
We saw the markets creep up a few percent in the stock market, of course, that came across in Bitcoin as well. I was looking for a little longer than just one day of an up move and potentially testing some resistance levels for Bitcoin at around forty thousand six hundred dollars which we’ve been tracking for a long time now and as for uh cryptos we specifically looked at examples of where that resistance would come in for the cryptos that you hold. Surprise! We didn’t even make it there. We only had one day up and now we’ve gone through a liquidation event. So, overnight the longs have been liquidated about 340 million dollars and to the shorts about 67 million. So, people go long and in the anticipation of further higher prices then we get the flip with the market makers dumping, the market back down must have been quite illiquid. They were able to push the price below previous support levels, but before we got to Bitcoin.
Let’s just take a look at s p because we’re looking at these macro views, I’m looking for a major low to come in the bulls have obviously failed in the short term. Maybe, we’ll also see a reversal in the short term because of the volatility that’s come back into the market as for the S & P. it has closed down. However, it didn’t break the low on the 2nd of May that was the day that we broke through these major lows of February. So, that was the war low Russia war low we broke through it. So, even with this liquidity event the markets have just held up above that low for the short term. I think it’s provided we continue to hold out that 4 00 and 62 points that’s on the S P, obviously. We’re looking at this and the NASDAQ as well to give us some sort of lead time into Bitcoin to see. What’s going on over the long term. The NASDAQ is faring worse than Bitcoin, it is still beneath those levels of February. So, that’s that major low that we’re looking at here in March and March 14th and February 24th it closed below that again and just ticked a couple of points below. The second of May so the weakness is really in the tech sector, definitely not a space that I’m looking to dollar cost average into tech stocks. I think they’re still going to be revalued even more, meaning prices will come down or, at least, go into some sort of trading range and stabilize for a period of time. Because as I’ve seen with this property cycle the money looks like it’s going to start flowing into banking and real estate compared to what we saw in the first half of the cycle. This is tech stock so a lot of the technology is getting us out of the previous slump of 2009. The GFC low tech pulls us back. That’s beside the point for now.
Let’s take a look at Bitcoin dominance. The dominance fell, however, cryptos also fell so like I said in the intro this doesn’t happen. All that often we have all the market fall and Bitcoin fare worse than cryptocurrencies. We know that bitcoin fared worse than a basket of cryptos here because the dominance is down which means Bitcoin fell more than other cryptos. We’re just starting to see that fall as well. So, what could come next? Well, we’ve got the 50 level here at around 41 and a half percent for the altcoins. If they are to continue to be stronger than Bitcoin, we have to see the dominance chart continue down. We have to see this break the 50 support level. We have to see it break, the current support that put in at around 41-41.5, and that would generally mean that alts will be holding their value better than Bitcoin. However, would probably still see the dollar values continue to drop across the board? It just means that the percentage might be a little less for major alts because that would then push this chart down before we get into the long-term analysis of Bitcoin. Just a reminder it’s early in the month so people that have been hanging out get into our Patreon for our weekly group called altcoin portfolios.
Now to Bitcoin over the last 24 hours well the bar here on the fourth fomc meeting last night we had the crash on bitcoin it has broken that significant level at around 37 37 and a half thousand dollars the good news a little bit of sprinkle of hoping that I can put on here is that we did bounce off the lower levels here at about that 35-36 000. So, we didn’t make it all the way back to the previous lows at 34 and also at 33. So, if this is the short-term capitulation reversal. We really need to see Bitcoin hold up now, start to put in a low and then move its way back above the first target of 37 and a half thousand dollars which is a line across here. Then, of course, the same deal again starts to move higher to break that 40 600, and then now that we’ve had to move our 50 percent level because the market continues to get lower that next level’s at around 42. But I’m still going to look at 43 because that is the peak before the market turned down back on the 21st of April. So, my level’s 37 and a half thousand 40 and a half thousand 43 000. There is a lot of work to do ahead of Bitcoin.
So, the Opium to the upside is quite difficult, the opium to the downside is we get cheaper prices but we’ll have to go through the pain in order to get there. Now, moving to the larger term time frame again. We’re looking at the weekly chart so these moves take a lot longer to happen. It’s not going to happen over the course of a week, maybe, not even a month. It can take many months as we’ve seen from the top in November. So, we’re coming up now to almost dead in the six months since that top in November and the old bear flag that has shown up from the top to the bottom. You can see we’ve got a little bit of a flag pattern here that looks like it wants to break down now – I’m not sure – if this is going to go straight down in another pole fashion like we saw at the top here. Maybe, we come back to test the lows, come back up, give us a bit of hope again, re-test the underside at around the high 30s to 40 000 before heading back down testing these levels and then again. There’s many ways that this can play out and it can take some time. The point is that we want to keep watching the support levels to see if the pattern is continuing or if the pattern will be invalidated. So we can start to see that if we do see a shorter drop-down and then move up with higher lows and then start to break those levels which we just talked about that would be a possibility of the bear flag being invalidated. We don’t get those lower prices on top of that. There is the 200-week moving average now. I don’t use moving averages very often but the 200-week looks pretty reasonable over the course of Bitcoin’s entire history coming back to test that in nearly every bear market. Now I don’t get too caught up in the terms bear bull whatever at the end of the day.
This article is a transcription of a video made by Jason Pizzino
Original video: https://youtu.be/icQbDD0ulLE
