elcome to our newest Market Outlook, where we delve into the thrilling realm of cryptocurrencies from a technical standpoint.
Prepare for an enlightening experience as we explore the current market conditions, providing you with the essential knowledge to stay ahead and make well-informed choices.
Get set to navigate the crypto landscape with expertise and capture those valuable opportunities!
Table of contents
- Market Heatmap and Fear and Greed Index
- US500, DXY and Gold Analysis
- USDT.D, Bitcoin and Ethereum Analysis
- Quotes / Advices
- Closing Remarks
Market Heatmap and Fear and Greed Index
To commence my research, I always start by checking the market heatmap, which provides a rapid overview of the entire cryptocurrency market. After encountering resistance around the 32,000 level, BTC's momentum has transitioned from a bullish to a bearish stance in the short term.
Interestingly, there has been a decline in BTC dominance, dropping from 52.16% to 49.9% over the course of this month. Consequently, altcoins have taken advantage of this situation and have been able to bolster their positions in the market.
Furthermore, the Fear & Greed Index has shifted to neutral after a couple of consecutive weeks, indicating "Greed." This comes as no surprise since, in the last two articles, we mentioned that Greed signals an upcoming bearish movement, especially given that BTC has been hovering around a resistance level.
Since the crypto market exhibits a strong positive correlation with the stock market, we consistently monitor the US500 index to gauge the overall market sentiment.
“S&P 500 Index, also known as the Standard & Poor's 500 or the US500, is an American stock market index that tracks the performance of the top 500 companies listed on the Nasdaq Stock Market or the New York Stock Exchange.”
US500 Chart - Daily Timeframe
US500 has maintained an overall bullish trend, trading within the ascending channels marked in red and brown.
The bulls retain full control; however, US500 is currently encountering strong weekly resistance at 4580.
To sustain the bullish momentum, a weekly candle close above 4580 is crucial.
Meanwhile, there is a possibility of bearish influence. In such a scenario, we will be on the lookout for trend-following buy setups as it approaches the blue support level.
For the bears to take control in the short term, we need a daily candle close below 4500.
As usual, we also keep a close eye on the DXY - USD Index because the value of nearly everything, including BTC/USD, relies on the USD as the benchmark currency.
DXY Chart - Daily Timeframe
After rejecting the round number support at 100.0, DXY has displayed bullish tendencies over the past few days.
The bullish sentiment is expected to persist, leading DXY towards the orange resistance level at 102.25.
DXY Chart - H4 Timeframe
A shift in momentum from bullish to bearish will only occur if the DXY manages to break below the previous significant low of 101.07.
In such a scenario, we can anticipate DXY to trade lower and retest the 100.0 support level again, which would be considered healthy for the crypto market.
GOLD Chart - Daily Timeframe
Gold has rejected our green resistance and is currently trading lower, heading towards the orange support at 1940. We will be on the lookout for trend-following buy setups as long as the support level holds.
For the bulls to gain control from a long-term perspective, we need a daily candle close above the round number 2000, which would be healthy for the crypto market.
USDT.D, Bitcoin and Ethereum analysis
As per usual, both USDT.D and the Fear & Greed Index serve as indicators of trader sentiment. USDT.D reflects whether traders are optimistic (investing in cryptocurrencies) or pessimistic (shifting towards stablecoins).
USDT.D Chart - Daily Timeframe
USDT.D has rejected a robust support zone around the 7% level and has traded higher.
At present, USDT.D is hovering around a significant swing high, marked in red, at approximately 7.46%. If this level is broken upward, we can expect further bullish movement until the next resistance at around 7.85%. In such a scenario, we may anticipate a bearish correction across various crypto assets.
Alternatively, the bears could intervene and reject the 7.46% resistance, pushing USDT.D lower, which would result in a bullish movement for the crypto market.
BTC Chart - Weekly Timeframe
The above Weekly chart indicates that BTC has a tendency to respect round numbers with intervals of 10,000.
BTC has been overall bullish for the past couple of months, characterized by higher highs and higher lows, as highlighted on the chart.
However, it is currently navigating around a strong resistance zone that previously acted as support.
For the establishment of a long-term bullish momentum and the potential initiation of the next bull run, a crucial requirement is a weekly candle close above 32,000.
In the meantime, there remains a possibility for bears to take control and prompt a further correction in the market.
BTC Chart - Daily Timeframe
After being trapped within the 30,000 to 32,000 range for a couple of weeks, the bears have gained control this week by breaking the range downward.
As a result, we can expect a downward movement towards the green support and trendline, approximately at 27,500. Once it reaches that level, we will be vigilant for new short-term trend-following buy setups.
BTC Chart - H4Timeframe
From a medium-term perspective on the H4 timeframe, we can clearly observe a shift in momentum from a slight bullish trend to a bearish one, as BTC is presently trading within the confines of a falling broadening wedge pattern, marked in red.
As mentioned in the Daily timeframe analysis, the bears will continue to have control, unless the bulls can successfully break above the upper red trendline and the last major high.
ETH Chart - Daily Timeframe
ETH is currently confined within a significant range, fluctuating between 1600 and 2250.
To establish bullish dominance from a long-term viewpoint, a weekly candle close above 2250 is essential.
On the other hand, if we breach the crucial low at 1822 in gray, we can anticipate a bearish movement towards the 1730 demand zone, where we will be on the lookout for trend-following buy setups.
ETH Chart - H4 Timeframe
For the bulls to regain control from a short-term perspective, a break above the last major high marked in orange at 1906 is required. Meanwhile, ETH will continue to display a bearish trend as it trades within the falling orange channel.
Quotes / Advices
Repeat this out loud until it's seared into your brain: "The Market is Random"
No amount of preparation can prepare you for someone on the other side of the globe making a monumental trade that disrupts all your plans.
If you can't alter what's going to happen, then you can't be upset when it does.
Simply accept that the market will do whatever it wants, and most importantly, stick to your trading plan no matter what!
And always remember: “Plan Your Trade and Trade Your Plan!”
Closing Remarks
In summary, today we have examined various aspects of the cryptocurrency market, as well as its correlations with the stock market and the USD.
The market heatmap revealed a shift in BTC's momentum from bullish to bearish, accompanied by a decline in BTC dominance, which has allowed altcoins to strengthen their positions.
The Fear & Greed Index indicated "Greed," potentially signaling an upcoming bearish movement in the market.
Monitoring the US500 index, DXY, and Gold provided insights into the overall market sentiment and potential impacts on the crypto market.
BTC and ETH have been exhibiting varying trends. BTC's weekly chart suggests a need for a candle close above 32,000 to establish a long-term bullish momentum, while its daily and H4 timeframes indicate short-term bearish trends.
ETH, on the other hand, has been trading within a range, with a weekly close above 2250 being essential for bullish dominance.
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