---skip to the end for a summary if you don't want to read this all--
Preface:
Well what a week, crypto fam! Many of us in the đź“—technical-analysis side of the house were expecting a little rally here - some expecting a 'dead cat' bounce (ie. a temporary rally before falling more), others expected the Canada and Ukraine narrative to serve as a catalyst for real world adoption, and others like me just consulted a mix of indicators or on-chain data and observed growing bullish divergences. -
In any case, this is arguably one of the more impressive rallies in Bitcoin's history. Bottom to peak over the past 72 hours - Bitcoin rallied nearly 22%. Altcoins followed a similar but weaker trajectory (mostly), as this was absolutely Bitcoin's time to shine. Of course a few alts are always doing their own thing.
Summary:
Now back to the chart. You may remember this from earlier in the year or last year. This is my high-timeframe chart that shows the rising support level for the cycle (Q4 2020 until today).
The bearish trend was exhausted in late February as we respected that support level around $34.3 and bounced. $34.3 is a major confluence of support including the point of control (POC) where the most traded volume (by price) for the macro pattern sat; the macro support trendline, and monthly support levels from last bear cycle in mid 2021.
All that to say that despite the macroeconomic picture, we have repeatedly respected the bottom range in this pattern, and the lower
30S is a strong support level with each visit there resulting in a strong rally.
Analysis - So Whats Next?
The first thing I see is that price rallied hard into the bull market support band, which consists of two moving averages - the 20w SMA and 21w EMA. These are your general measure of bull or bear cycles. When we are below it, we are technically in a bearish range and typically this is reflected by predominantly bearish sentiment in the market.
It normally takes a few taps of that support level to break through. Because this band represents such a key psychological level in the market, a lot of people will take profit and supply is distributed, resulting in a short selloff. But if bulls are growing in strength, as it appears, each selloff at that band will grow weaker until bulls finally buy up all of the supply.. and when supply is exhausted, price needs to move up through the 20/21w MA band until more supply is encountered .. and we re-enter a bullish market range!
Local supports- on HTF I suspect $40k is our new macro support in this range, with my favorite short/mid range s/r level (the 12h 20 EMA) overlaps it, lending strength to this level. If bad news comes out of Ukraine or something bearish from the Fed regarding tapering, thats the first major support level to watch. There are intermediate supports higher than that, in the upper
41K and 
42K range that you can watch as well. Locally $44.2k may serve as the nearest support level.
Local Resistance - on HTF the 20/21w MA band is the very obvious resistance bulls need to overcome. $44.3k is also the end of the local value range, just below the 21w EMA at $45k, meaning overlapping resistance levels in this range. A bit of consolidation against this resistance will have to occur before bulls can attempt another breakthrough.
Bottom Line:
Bulls need to retake $50k,-just- above the 20w SMA, to confirm a return to bullish markets. Until then, the 20/21w MA band will serve as major resistance and has since November. At least in my opinion. On-chain looks healthy and a fair amount of validation there that we can continue to rally, with supply continuing to trend down, demand growing, miners taking some early profit for the first time in months. But also keep in mind that the issues in Ukraine can still escalate and introduce extreme volatility into markets, and possibly invalidate the growing bullish sentiment. Trade safely.
Preface:
Well what a week, crypto fam! Many of us in the đź“—technical-analysis side of the house were expecting a little rally here - some expecting a 'dead cat' bounce (ie. a temporary rally before falling more), others expected the Canada and Ukraine narrative to serve as a catalyst for real world adoption, and others like me just consulted a mix of indicators or on-chain data and observed growing bullish divergences. -
In any case, this is arguably one of the more impressive rallies in Bitcoin's history. Bottom to peak over the past 72 hours - Bitcoin rallied nearly 22%. Altcoins followed a similar but weaker trajectory (mostly), as this was absolutely Bitcoin's time to shine. Of course a few alts are always doing their own thing.
Summary:
Now back to the chart. You may remember this from earlier in the year or last year. This is my high-timeframe chart that shows the rising support level for the cycle (Q4 2020 until today).
The bearish trend was exhausted in late February as we respected that support level around $34.3 and bounced. $34.3 is a major confluence of support including the point of control (POC) where the most traded volume (by price) for the macro pattern sat; the macro support trendline, and monthly support levels from last bear cycle in mid 2021.
All that to say that despite the macroeconomic picture, we have repeatedly respected the bottom range in this pattern, and the lower
30S is a strong support level with each visit there resulting in a strong rally.Analysis - So Whats Next?
The first thing I see is that price rallied hard into the bull market support band, which consists of two moving averages - the 20w SMA and 21w EMA. These are your general measure of bull or bear cycles. When we are below it, we are technically in a bearish range and typically this is reflected by predominantly bearish sentiment in the market.
It normally takes a few taps of that support level to break through. Because this band represents such a key psychological level in the market, a lot of people will take profit and supply is distributed, resulting in a short selloff. But if bulls are growing in strength, as it appears, each selloff at that band will grow weaker until bulls finally buy up all of the supply.. and when supply is exhausted, price needs to move up through the 20/21w MA band until more supply is encountered .. and we re-enter a bullish market range!
Local supports- on HTF I suspect $40k is our new macro support in this range, with my favorite short/mid range s/r level (the 12h 20 EMA) overlaps it, lending strength to this level. If bad news comes out of Ukraine or something bearish from the Fed regarding tapering, thats the first major support level to watch. There are intermediate supports higher than that, in the upper
41K and 42K range that you can watch as well. Locally $44.2k may serve as the nearest support level.Local Resistance - on HTF the 20/21w MA band is the very obvious resistance bulls need to overcome. $44.3k is also the end of the local value range, just below the 21w EMA at $45k, meaning overlapping resistance levels in this range. A bit of consolidation against this resistance will have to occur before bulls can attempt another breakthrough.
Bottom Line:
Bulls need to retake $50k,-just- above the 20w SMA, to confirm a return to bullish markets. Until then, the 20/21w MA band will serve as major resistance and has since November. At least in my opinion. On-chain looks healthy and a fair amount of validation there that we can continue to rally, with supply continuing to trend down, demand growing, miners taking some early profit for the first time in months. But also keep in mind that the issues in Ukraine can still escalate and introduce extreme volatility into markets, and possibly invalidate the growing bullish sentiment. Trade safely.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.