Technical Analysis
Good Morning!
Bitcoin BTC$ (4h)
So, we are back to square one on the Bitcoin chart. The triangle did not get confirmed and we, subsequently, broke through the downside and even through 18.5k. The selling pressure lost some steam in the 17.5k area, and a nice reversal over the weekend got us back up to the current price levels.
First, we are in a consolidation phase, which is usually accompanied with "choppy" markets. Then again, within a consolidation phase you always need to be on the lookout for further patterns. Maybe we are in a bigger ascending triangle formation. The lower trend line is not (yet) very strong. We only have two touch points, which does not make it a trend line. The topside looks more interesting with several touch points and another rejection from early this morning.
You might have noticed that I stopped posting heat map charts during the rally from 12k up to 19k. The reason for this was that there were almost no standing orders to plot. Now, during this consolidation phase we are seeing them starting to pop up again.
Bitfinex, which still has very good spot liquidity, started to show some clusters above 19.5k (sell orders) as well as some buy orders further down. The topside cluster adds up to almost 2k BTC on the offer. The further up we go, the bigger the order blocks are. On the downside, we have the first cluster at 19k, with roughly 750 BTC, and further down another 1k BTC around 18.5k. There are more buy orders further down until the 16k level, which started to pop up when we pushed below the 18k level early last week.
Other spot exchanges, e.g. Coinbase, Kraken, and Bitstamp lack a well populated orderbook, especially on the topside. There are some sell orders just around the 20k level. I would say that across all of these exchanges, we have roughly 2k BTC on the offer. Binance is the more aggressive one with about 4k BTC on the offer between 19.6k and 20k. You can see the asymmetrical orderbook on the right-hand side next to the chart.
Pretty much every orderbook looks the same when we look past 20k. They are empty with some exceptions at what I call the option strike levels. I have mentioned this a few times in the past, the setup still looks like if we leave the "main station" (hence 20k), the BTC train will drive with full force towards 25k due to a sell-side liquidity crisis. This might even end up with some proper FOMO and a nice blow-off top to finish this leg of the rally.
But in terms of a shorter term outlook, I see too much pressure to eat through that 20k barrier. We are still looking for a correction within that possible ascending triangle, or even a push through the lower leg to shake out some leveraged or late longs.
The way I play it is to try to preserve capital within the consolidation phases in order to have enough fire power to engage when we break to the downside, so that I can either catch some cheap coins, or load up when we fly through the topside barrier.
I will not post any other charts since this report is already a bit long. But feel free to reach out to us at the desk to chat about other coins and their technical setup.
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