BTC VWAP Rainbow Revisited
BTC has been wrestling with the 19-20k range for quite some time now.
Comparing to the last bear market (2018), BTC has found support on its anchored vwap line taken from the peak candle of the bull market preceding it (2013). If we do the same (i.e. take the anchored vwap from the peak candle of the preceding 2017 bull run), we can see that this is more or less where we have found support again in this 2022 bear market.
Looking at this similarity alone might suggest we've bottomed...
However i'm not convinced for the following reasons:
- Macro conditions remain bad and unprecedented w.r.t. crypto's time of existence.
- Powell has recently seemed to be suggesting he'll remain aggressive with rate hikes, given we are nowhere near out of the woods with regards to inflation (in last report core inflation increased from 5.9% to 6.3%). This puts further stress on risk assets like crypto and similarly trading stocks.
- More aggressive rate hikes increase the probability of a recession. (no good 4 us short term, probs good long term though)
- BTC is far from ~50% market dominance. Alts have over performed against BTC over the past few months on the back of ETH Merge hype. That hype has since fizzled away. What could happen is BTC continues to fall, while everything else falls way harder.
14 period RSI is beginning to cross over to oversold territory on the weekly chart with more room to go down, while the 60 period rsi remains deep red and wave trend flashing a bearish cross.
Moreover, BTC remains below it's historically significant 20 week avg. A decisive cross above it would be a pretty clear buy signal for me and a sign of better things to come.
I do think we could retest it sometime soon as alts bleed against BTC. However unless things change on the macro scale i'd expect that retest to get rejected.
In the event of bearish continuation, big support seems to begin at around 12k when considering the volume profile. This is where I feel comfortable making aggressive buys. This also coincides with the anchored vwap taken from the 2013 peak and the 2 fib when drawing the trend line from the spring 2021 lows to the ath. Some decent confluence there has me thinking that is a potential macro bottom before our next bull run.
Comparing to the last bear market (2018), BTC has found support on its anchored vwap line taken from the peak candle of the bull market preceding it (2013). If we do the same (i.e. take the anchored vwap from the peak candle of the preceding 2017 bull run), we can see that this is more or less where we have found support again in this 2022 bear market.
Looking at this similarity alone might suggest we've bottomed...
However i'm not convinced for the following reasons:
- Macro conditions remain bad and unprecedented w.r.t. crypto's time of existence.
- Powell has recently seemed to be suggesting he'll remain aggressive with rate hikes, given we are nowhere near out of the woods with regards to inflation (in last report core inflation increased from 5.9% to 6.3%). This puts further stress on risk assets like crypto and similarly trading stocks.
- More aggressive rate hikes increase the probability of a recession. (no good 4 us short term, probs good long term though)
- BTC is far from ~50% market dominance. Alts have over performed against BTC over the past few months on the back of ETH Merge hype. That hype has since fizzled away. What could happen is BTC continues to fall, while everything else falls way harder.
14 period RSI is beginning to cross over to oversold territory on the weekly chart with more room to go down, while the 60 period rsi remains deep red and wave trend flashing a bearish cross.
Moreover, BTC remains below it's historically significant 20 week avg. A decisive cross above it would be a pretty clear buy signal for me and a sign of better things to come.
I do think we could retest it sometime soon as alts bleed against BTC. However unless things change on the macro scale i'd expect that retest to get rejected.
In the event of bearish continuation, big support seems to begin at around 12k when considering the volume profile. This is where I feel comfortable making aggressive buys. This also coincides with the anchored vwap taken from the 2013 peak and the 2 fib when drawing the trend line from the spring 2021 lows to the ath. Some decent confluence there has me thinking that is a potential macro bottom before our next bull run.
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.