Lets review the market over the past 48 hours:
Bitcoin was rejected from two key levels:
1.) the 20/21w MA bull market support band. Bulls rallied Bitcoin for a second time this week to challenge that band of support-turned-resistance. And for a second time they were denied, resulting in a small selloff, followed by;
2.) a retest and denial of support on the 12h 20 EMA, my favorite midrange support. Losing that usually (not always) signals double-digit selloffs before price reverses back up. But considering the crabbing we've done in recent weeks, it may just signal additional crabbing and consolidation.
LEVELS TO WATCH:
Between $46k and $47.5k is a range of supports dating back to several patterns thru 2021, most recently in early to mid December. This would lead to a higher high for December, and a good sign for continued recovery.
However if we lose that level, the next key support is around $44.8k (resistance flipped support from April 2021). And below there, $43.5k is a monthly support, and $42k is our 10 year channel support for mid-market. If we drop to the lower $42k range, a wick into the upper $30k range feels possible, but not for long.
OPTIONS:
End of year options expiry is also adding additional weight on the market, as they tend to do.. and max pain was somewhere around $48k last I checked; max pain is where price tends to gravitate towards during options expirations.
ON CHAIN DATA:
We are observing a (possible) worrisome sigh is a pattern repeated from the April pre-peak period where Bitcoin began to demonstrate price weakness, and the general market started to sell out of positions producing an increase in supply.
We are on the 6th day of increase in supply on centralized exchanges with the 7 day mean inflows rising to bearish levels. Although the past 4 months are strong net accumulation still, a sustained or strong inflow and increase in supply generally indicates early stages of a selloff; and combined with failing to recover the 20/21w MA band puts me closer to taking profit on some of my bags.
That said, on-chain data can be misleading too. Rising supply can be interpreted as bullish or bearish depending on how its used, though in this case I am leaning bearish, but I don't see it as threatening as the May selloff and still have hopes for a Q1 rally, assuming the current inflows/and rising supply tapers down soon.
Bitcoin was rejected from two key levels:
1.) the 20/21w MA bull market support band. Bulls rallied Bitcoin for a second time this week to challenge that band of support-turned-resistance. And for a second time they were denied, resulting in a small selloff, followed by;
2.) a retest and denial of support on the 12h 20 EMA, my favorite midrange support. Losing that usually (not always) signals double-digit selloffs before price reverses back up. But considering the crabbing we've done in recent weeks, it may just signal additional crabbing and consolidation.
LEVELS TO WATCH:
Between $46k and $47.5k is a range of supports dating back to several patterns thru 2021, most recently in early to mid December. This would lead to a higher high for December, and a good sign for continued recovery.
However if we lose that level, the next key support is around $44.8k (resistance flipped support from April 2021). And below there, $43.5k is a monthly support, and $42k is our 10 year channel support for mid-market. If we drop to the lower $42k range, a wick into the upper $30k range feels possible, but not for long.
OPTIONS:
End of year options expiry is also adding additional weight on the market, as they tend to do.. and max pain was somewhere around $48k last I checked; max pain is where price tends to gravitate towards during options expirations.
ON CHAIN DATA:
We are observing a (possible) worrisome sigh is a pattern repeated from the April pre-peak period where Bitcoin began to demonstrate price weakness, and the general market started to sell out of positions producing an increase in supply.
We are on the 6th day of increase in supply on centralized exchanges with the 7 day mean inflows rising to bearish levels. Although the past 4 months are strong net accumulation still, a sustained or strong inflow and increase in supply generally indicates early stages of a selloff; and combined with failing to recover the 20/21w MA band puts me closer to taking profit on some of my bags.
That said, on-chain data can be misleading too. Rising supply can be interpreted as bullish or bearish depending on how its used, though in this case I am leaning bearish, but I don't see it as threatening as the May selloff and still have hopes for a Q1 rally, assuming the current inflows/and rising supply tapers down soon.
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