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Fundamental background has changedMorning everybody, Under negative GDP numbers and Fed trash talks, there are few who signed a shift in fundamental background. US government and Fed are defeated by inflation and turn back to QE(as well as ECB). Fed fails to keep QT pace, buying less bonds that it has promised. In fact, with spending money from US Treasury deposit - there was no tightening but easing for $250 Bln since the start of the year. Now, new J. Biden programmes on semiconductors and climate should pump additional $1Trln. All of them sooner rather than later go to the markets. As a result, in nearest 6-8 months we should see the visuality of prosperity when stocks and BTC will stop falling and US yields will stop rising. But this is temporal relief. Inflation remains and will keep going higher, to 20%. Collapse is postponed but it is not cancelled, and will happen anyway. Still, in short-term, BTC easily could re-test 28-32K area within few months. We keep our long-term 9K and 12K targets, but its reaching aso postpones. Now we do not consider taking new strategic bearish positions. In short-term it seems that 22-22.3K area and 20.3K area are interesting to consider long entry, with invalidation point below 20K. We endure daily upside channel with next upside target around 25.5K and 26-26.2K major daily resistasnce.
COINBASE:BTCUSD
by Sive-Morten
GDP will help?Morning folks, So, BTC keep showing upward pullback and recent dovish Fed decision has let it to start upward action from predefined level: As we expect negative GDP numbers, in a moment it should weak the US Dollar, which in turn, should be supportive to BTC and could let it to reach next 25.5-26K resistance area. For position taking you could use most recent swing with invalidation point at 20.7K lows. But this is only if you like data release games. Otherwise, just wait for the numbers.
COINBASE:BTCUSD
by Sive-Morten
1
At the eve of collapseMorning folks, So, miracle has not happened and BTC stucked around 23K area - first major daily resistance area. On intraday charts we do not have any bearish patterns yet and could even say that bulls have theoretical chances on upside action to 25.5-26.2K next resistance area, but... we do not believe that this will happen... and here is why. With coming big bulk of fundamental data - almost all of them should be negative to stocks and BTC. First is, Google and Microsoft reports on 27th of July supposedly will be worse than expected. 1% rate hike from the Fed also hardly bring optimism to the markets, finally, we expect negative IIQ GDP numbers on Thu, and official US step in recession stage. That's why we stay aside this week from any purchasing of BTC. Maybe we will be wrong, but we prefer to get worse entry price but with clear background, rather than gambling on big statistics. Technically, we suggest that 20K area is an edge. Downside breakout suggests bearish reversal and downside trend continuation. If you believe that BTC will go up and have different view on coming data - then you could keep an eye on two support areas where BTC stands. First one is 3/8 major support. Next one is 20.15K area, another Agreement with XOP. If BTC is really bullish and tending to 26K area - then it has to stay above these levels.
COINBASE:BTCUSD
by Sive-Morten
Watching for bearish patternsMorning folks, As BTC stands relatively free until major events on next week, it shows tactical upside pullback where we've set two targets. First one around 23K is completed already and next one is around 25.5K. Although we think that chances that BTC will reach it are low. This week it is vitally important where market will close, because it makes direct impact on weekly chart and we could get two bearish patterns. (Watch today's BTC video on FPA site). Here the logic is simple. If you have long-position - you could keep it, just do not forget to manage stops higher. Next target is double XOP around previous lows of 25.5. There we also have daily 5/8 resistance area and daily overbought. Bears could watch for reversal patterns as upside bounce could stop at any moment. Once it will happen - you could try to go short. For example, now you could watch for 1H H&S pattern:
COINBASE:BTCUSD
by Sive-Morten
Pump it back!Morning folks! I suppose you're very inspiring with recent BTC performance, thus, we did also suggest last time upside action. But to be honest - it is nothing to be happy about. Those who read our Fundamental reports on FPA site know what I'm talking about. The reason of the rally on stock market and BTC is Fed liquidity pump in recent two weeks. Yes, we already have explained recently this phenomenon, but in last two weeks there were big changes there, and we have to mention it here to warn you. This is artificial rally, guys. Banks need to sell their huge positions in stocks and BTC. They use Fed liquidity to initiate reversal. Once public is involved - they start selling their positions to them. In general, since April 12, Fed has taken off 75 Bln. liquidity from the market. It seems, what's the problem? But the problem with US Treasury cash deposit - it has decreased for 300 Bln + within the same time. It means that net injection was more than for 200 Bln within the same period. If you take a look on changes in recent two weeks - net injection was around $50 Bln. That's why stock and BTC markets are rising. It is no problem to trade it long on intraday charts. We're mostly speaking on long term investing - we stay aside for awhile from long position taking. As we have the whole week until Fed meeting, BTC market should get some freedom, so we do not exclude reaching of 23K nearest target and maybe 25-26K as well. Although we have big doubts on a latter one... Supposedly as 23K as 25-26K should become an areas potentially interesting for short entry.
COINBASE:BTCUSD
by Sive-Morten
weak relief to the bullsMorning folks, As we've warned last time - BTC has to keep dropping because of fundamentals and cheating Fed action with its QT programme. Recent CPI numbers also stand not in favor of the bulls - now we could suggest 1% Fed change on next meeting. Thus, we're sceptic on any bullish performance right now. Based on technical picture we do not argue against minor bounce to 21.15-21.40 K area, but we do not see any fundamental changes and preparation for the shift of major trend. Thus, we do not consider any long positions by far. If the pullback still happens, it should be good opportunity for taking new shorts here.
COINBASE:BTCUSD
by Sive-Morten
Fed is cheatingMorning folks, BTC was able to show a bit higher pullback, reaching minor 3/8 Fib resistance around 21.30K, although we've expected direct downside continuation. Why we've made a mistake? Well, we've trusted to the Fed promise that it should sell 48.5 Bln assets off the balance... But they have lied. In June they have sold six times smaller amount - just around 0.7 Bln. But it is not all yet guys. Since May, the US Treasury deposit decreased for 300 Bln. Money was withdrawn and sent into economy. It means that net liquidity inflow is + 250 Bln, instead of -48.7B as it should be. So, feel the difference. Of course the bulk of these money flow to the stocks, which explains why they are stopped dropping. As BTC has 90% correlation with NSDQ, it also gets some money... But, since the start of the July Fed has sold about 20 Bln (look TW chart WSHOSHO). And markets immediately have turned down again. Thus, it is simple explanation with no changes in fundamental background. This also makes us to not change our opinion and wait for 12K area - our next target. We do not consider any long positions now. For the short entry you could use bearish flag pattern on daily chart and few Fib levels to decide where to hide the stop. Besides, this week we get new CPI numbers. As liquidity has not been contracted - numbers probably will be above expectations, which provides more pressure on BTC as well... Take care, S.
COINBASE:BTCUSD
by Sive-Morten
butterfly re-shapedMorning folks, As we've suggested last time - butterfly could be re-shaped if BTC shows upside AB-CD action but it makes no impact on its target and on the direction. Now we have three technical reasons to expect downside continuation on BTC market . First is the same bearish dynamic pressure on the daily chart, where MACD stands bullish but price action is not, forming pennant consolidation. Second is, the shape of price now. It is very choppy and indecision, showing no signs of reversal or thrust. Finally - our butterfly on 1H chart with the same 18K target. Thus, we do not consider any long positions by far and downside action should continue sooner rather than later...
COINBASE:BTCUSD
by Sive-Morten
Watching for 18KMorning folks, It is not occasionally every time we point that we do not consider any long positions on BTC market, despite that show you bullish patterns from time to time. Based on our Fundamental view - it is too early to speak on reversal as Fed has not started the tapering yet, but BTC already has lost 60% of capitalization. So, our approach is to watch for bullish patterns for better estimation of short entry areas. And take a look - the reverse H&S pattern that we've discussed last time has failed. Although BTC shows slow downside action, but we see few bearish nuances suggesting that it is temporal and sooner rather than later BTC should renew the lows. Currently it is difficult to find more or less clear pattern, but it seems that on 1H chart it might be the downside butterfly with nearest target around 18K area. The only question is whether downside action starts immediately or BTC will try to form minor AB-CD pattern. That's being said, we suggest to not buy BTC right now. If you search the way to go short - maybe this setup will be interesting to you. Take care, S.
COINBASE:BTCUSD
by Sive-Morten
Watching 23-24K for short selling #2Morning guys, So, H&S that we've mentioned week ago is working slowly. It is not necessary to talk alot about it. Since bearish fundamental background has not changed and we still have long term 12K target - we consider this pattern as the chance to get better entry price on the short side. Thus, if miracle happens and it works, then 23-24.2K area seems like nice resistance for selling. Conversely - H&S failure and drop below 20K lows is not the worse scenario for the bears. It also tells that upside party is over. For the bulls - if you have taken position with this pattern, move stops to breakeven and watch the movie.
COINBASE:BTCUSD
by Sive-Morten
Watching 23-24K for short sellingMorning folks, Well, as you know - we're sceptic on any bullish setups that BTC is forming, just because we know the fundamental situation and it has no chances to normalize within few years. Thus, we keep valid our long-term targets on BTC of 12-13K and next is 8-9K. Now market has big technical problems - it has no more strong supports, it is not at oversold and it is re-testing previous vital top of 20K. If price breaks it down - bitcoin sets the new "old" trading range of 3-20K. But, this is a bit longer-term story. In short-term, market is taking relief after tough week, and all assets show the pullback, including interest rates. Thus, BTC could try to do the same, although, last time it was not able to form even minor reverse H&S on intraday chart, that we've shown you. WE do not plan to trade any bullish pattern, but we use it for special purpose. If pattern is formed - it shows us what levels to watch for short entry. Right now, if miracle happens and H&S pattern will be formed - supposedly 23.5-24K area might be interesting for new short entry. Still, it is not forbidden to make scalp long trades. We ignore it because trading time scale and because they are very unstable in current environment - but if you feel confidence, you could try.
COINBASE:BTCUSD
by Sive-Morten
1
23.5K and then 21KMorning folks, Those who read our weekly reports on FPA site on fundamental analysis of the US economy probably are not surprised with the BTC collapse. As BTC as the stock market are doomed. We expect 2500 level on S&P on mid-term perspective with further drop below 2000 in longer-term, which means that our long term targets on BTC is 12K and 8K... Now BTC is challenging the last bullish outpost around 25-26K. This is last 5/8 all time Fib support on BTC. Lower is just a "free" space. Thus, currently we intend to go from one tactical target to another and control oversold levels. Now daily oversold level is ~21K. Potentially market could reach two extensions. First one is 1.27 and it stands at 23.5K, next one is 1.618 - 21K, that is very close to daily oversold. This is the program until Thursday, guys. If Fed rise rate for 0.75 - downside action should accelerate. Intraday upside retracement should not be too strong. At first glance, it seems that 26.2K and 27-27.4K are two levels that worthy of our attention, where we could consider short entry. Obviously we consider no new long positions.
COINBASE:BTCUSD
by Sive-Morten
2
No inspiration to buyMorning folks, Price performance looks nervous in recent few sessions. Based on what I see on intraday chart, it seems that BTC is trying to break down the 29.65-29.67 K support area that we've discussed previously. Because it doesn't look like upward reversal. On daily chart we have bearish wedge consolidation and uncompleted weekly 25.9K target. Yes, lower CPI numbers could provide short-term momentum and let BTC to complete our 34-34.4K upside target. But this is different type of trading. You could try to bet on CPI numbers, if you want. Purely technical price action makes me to stay aside from long positions by far. Here I even do not consider our long term fundamental view, that is bearish.
COINBASE:BTCUSD
by Sive-Morten
$34.10K ?Morning guys, This update is better to watch together with the previous one. So, our topic is next BTC target - 34.10K. How do you think, whether it will reach it? I hope so. At least the start of the week looks inspiring. In fact, last week Fed has added to financial system around $140 Bln (check the cash account of US Treasury), and this has let market to find the local bottom. Last time, when market just has reached support area, we said - it could bounce, but we do not see yet the signs of upside reversal. Now we see that support level is valid and price is bouncing up with signs of thrust. Although theoretical chances exist that we could get deeper AB=CD shape retracement down to 28K area, but we treat this chance as not very significant. With current performance we do not consider any bearish positions by far. Second - we should not get any deep retracements, as it already is done last week, and now by our view BTC stands in extension leg to the next target. It means that the most probable levels that could be reached and you could consider for long entry are 30.40-30.50K and 30.80K. Drop back to the 28 K area will not totally destroy upside chances, but makes context weaker. Because in this case we get too deep retracement after reaching of just minor target last week. Besides, in this case market erases current rally...
COINBASE:BTCUSD
by Sive-Morten
Common tendencyMorning folks, So, BTC has hit our first 0.618 upside extension and shows 3/8 pullback, which is normal. Downside action looks a bit strong and BTC now shows no signs of upside reversal. But we see two factors that could let BTC to keep going with the upside AB=CD pattern. First is cross-market analysis. On 10year yield we have clear H&S pattern, on FX, Gold market price action shows signs of recovery and possible more extended upside action. Thus, we hope that maybe BTC follows with the common tendency, at least at some degree. Second is, strong K-support area. Thus, in current circumstances, despite that our long term view is bearish, right now we do not consider new shorts positions by far. For long entry you have two options - either to take position right now, relying on strong support and other markets performance. Alternatively wait for first upside reaction before position taking.
COINBASE:BTCUSD
by Sive-Morten
Fed liquidity supports marketsMorning folks, BTC now follows to common tendency that we see on all markets - FX, stocks, bonds etc. But this is not the change of the trend, this is not the breakthrough in the mind of investors, guys. This is just liquidity pumping from the Fed. Although QT programme should start in June, in recent two months Fed "returned" back ~ $200 Bln, and this is the major reason of current upside performance. So, this pullback is temporal, the party will be over soon and we do not change our long term bearish view, when BTC could reach 11-12K area. Meantime, although upside action has not erased yet the butterfly pattern that we've discussed last time, chances for its erasing are significant. This makes us to not consider taking any new shorts by far. By looking at 4H chart, we have two major targets - COP around 31.75K and potentially to major daily area around $34-34.50K. If you would like to take part with this action - you could consider intraday 29.75-29.78 K-area and 29.10 major 5/8 Fib support for position taking. In a longer term, current upside action could change the shape of the price a bit tactically, but it doesn't change the fundamental background, so reversal down will happen just with other patterns, say daily "222" Sell from 34K area. Just as example... but it will happen anyway... ;) Take care.
COINBASE:BTCUSD
by Sive-Morten
1
23 then 20K?Morning folks, So, bearish signs are still here. On the daily chart the same pennant that we've discussed last time. On 4H chart market was not even to complete "222" Sell pattern that we've discussed last time. I wouldn't even talk about butterfly and its target around 32 K level. As in the long-term we expect 2500 level on S&P 500 index, our view on BTC stands bearish as well. We do not consider taking any long positions by far. In short-term, chances for downside butterfly increases. The next pattern's target stands around 23K, next one 21.5K and very close to ~20K area of 200-day MA... Be aware of GDP release today as well. Chances for negative surprise are high.
COINBASE:BTCUSD
by Sive-Morten
3
pitty reliefMorning folks, Last week we said that we're not inspired with the BTC performance and called to stay aside from taking long position by far. Our long term view has not changed, as we think that BTC should drop more in mid term perspective. In short-term, market could reach 32-32.20K resistance area but we also see risk of downside continuation. First is, on daily chart you easily could recognize the pennant shape, which is potentially bearish continuation pattern. Overall upside action is too slow and choppy, showing no thrusting feature, which makes doubtful idea of upside reversal. In fact, we have two Gartley's potential patterns here. If it becomes the butterfly - market could complete COP target of AB=CD extension around 32-32.2. But, it might be only "222" Sell, with following appearing of daily downside butterfly... Currently whatever pattern you choose for the trading, you have to take the risk of anticipation because price action too choppy and no clear signs of dominance of any pattern. Fundamental picture stands not in favor of upside reversal.
COINBASE:BTCUSD
by Sive-Morten
No longs #2Morning folks, Fundamentally, crush of stock market recently, hawkish speech from J. Powell and J. Yellen and terrible US statistics keep us aside from any long positions by far. Technically - appearing of bearish grabber on Monday and tail close yesterday looks bearish. Besides, on the daily chart bullish trend by MACD and bearish price action suggest of existence of bearish dynamic pressure. On intraday charts market also has broken the natural way of upside action, ignoring even near standing targets. This makes us think that BTC very soon could return back to the lows. Maybe later we get some proper reaction on strong support area, but not yet. Those who have bearish positions since Mon - could keep them, just do not forget to manage the stop orders.
COINBASE:BTCUSD
by Sive-Morten
1
No longsMorning folks, So, market is trying to show the reaction on our major 26K support area, but it can't succeed yet. First is, today we could get bearish grabber that suggests forming of the new lows. Second - by taking a look at 4H chart we could see that BTC was not able even to complete minor 0.618 AB-CD target, hits the nearest 3/8 level and keep dropping. On 1H chart you could identify skewed H&S pattern, but BTC has problems with it as well These moments keep us aside from taking any long positions by far. Bears could try to anticipate grabber appearing with the stop somewhere above 32K initially. But - control that price close today at current levels or lower. Otherwise you will have to out, if grabber will not be formed. That's the risk. Alternatively - wait for tomorrow. In longer term, we see rising risk of BTC drop below 20K area, reaching our next 12K target as Fed doesn't stop sucking liquidity out of all markets, where the cryptos are the primary source and has lost already 60% of capitalization. Correlation with NASDAQ stands around 95% that confirms everything that we said since the last year - investors treat cryptos like second quality stock and it falls under sell-off first.
COINBASE:BTCUSD
by Sive-Morten
1
26K target is completedMorning folks, Well, actually as BTC just has hit our long term target - it is not too much to tell about short-term situation. Now we avoid and short positions and wait for market reaction on strong support area. Particular speaking - what pattern will be formed around that let us to take tactical long position for the bounce. It probably takes few days. Supposed upside targets stand around resistance levels of 35K and the next one K-area. What is really interesting is a long term situation. As BTC confirms once again tight relation with the US stocks, and we expect miserable collapse of the stock market (that's actually already stands under way), chances of further drop of BTC in perspective of 4-6 months is growing. On monthly/weekly chart we already see rising bearish power. Next downside target stands around 12K. But if market drops there, hardly it recovers any time soon .
COINBASE:BTCUSD
by Sive-Morten
The road to 26K is openMorning folks, So, not occasionally we're skeptic on any tactic bullish setup. Thus, our recent intraday pattern even has not been formed, as market was not able to form the right arm of the pattern and collapsed not reaching the neckline. Thus, slowly but stubbornly we're coming to major 26K target. Actually BTC has no solid barriers on the way to it. Recent collapse has triggered the liquidation of miners' position as well. While BTC is coming lower - as more questions appears around final destination point. With the performance that we have on weekly chart, the 12K level doesn't seem like impossible anymore, especially in the light of our expectations of stock market collapse in nearest couple of months. That's being said, now we do not consider taking any long positions - neither for investing nor for speculative purposes. As BTC turns to extension mode, you could use most recent downside swing and its Fib levels to consider short entry. For instance, BTC could re-test broken support line, which also could be an option.
COINBASE:BTCUSD
by Sive-Morten