Bitcoin taken away by FTX while everything is green!

As I do every week, I review the previous week’s analysis and then explain my vision for the week ahead. Here we go!

Disclaimer: This article does not constitute investment advice or an invitation to invest. It is strictly for informational purposes only. You are solely responsible for the trading and investment decisions you make.

Debrief of the past week

Last week, we discussed the potential pull-back with a new start, everything was going well untilā€¦ FTX, dragging the entire markets down.

Black swan event (= an unexpected event influencing the markets)? Maybe. Since it wasn’t predicted by the market! So we spent a week of purging.

Not only did it put the long liquidations back in the bottom, but it also pushed the funding into a negative zone that has never been seen before!

Movement of the week on Bitcoin
Movement of the week on Bitcoin

And on the other hand, the DXY made a market top and the US market saw GREEN! We’ll come back to that in this week’s analysis!

Analysis of the week

The Dollars Index

We’ll talk first about what indirectly concerns cryptocurrencies, the DXY which is the dollar index! This one is making a TOP signal after 2 years of bullish rally.

2 years of bullish rally on the dollar
2 years of bullish rally on the dollar

Focus on the recent “TOP” of the dollar

Two years of bullish rally equals two years of bearish rally for cryptosā€¦ No, this is not a coincidence. When the dollar is strong, financial markets are weak, including Bitcoin.

So, having a top on the dollar is a harbinger of an upward turn for all markets (unless this is false to make me lieā€¦ But there are very rarely false signals on the dollar). Also, a market top on a weekly scale is strong and heralds a long term reversal. Personally, it was THE signal I was waiting for! More than a signal of the week, for me, it is a signal on the months/years to come.

A very interesting orderflow

While the purge was taking place, we had an unprecedented element. In addition to the return of open interests (= number of open leveraged positions) which fell back to their bottom zone, we had a sinking in the funding of altcoins (editor’s note: classic) and bitcoin (editor’s note: this is much more rare!).

Putting forward a level of funding never reached on Bitcoin!

These “purge” signals can therefore be seen as relevant for detecting a low point on cryptocurrencies.

Liquidations that are accumulating

However, one important point that would allow for a bearish continuation is the liquidations that await us in the SOUTH.

Highlighting Bitcoin's liquidation zones
Highlighting Bitcoin’s liquidation zones

Indeed, we still haven’t come looking for a big liquidation spike in Bitcoin, which stands at $14,500! It would be surprising now not to come looking for it. Nevertheless, the big positive is that once this point is reached, it will be difficult to envisage another important liquidity area other than those in the NORTH, including the big one at $21,000!

Conclusion

Unfortunately, it is impossible for me to give a clear opinion for the coming weekā€¦

Indeed, the current events highlight major problems of user confidence in CEXs. It would not be surprising if others collapse, allowing a bearish attack and cascading liquidations.

On the other hand, the macro signals show that finance is probably in bottom areas at the expense of the dollar which is showing us a bearish reversal. Finally, generally, after a very intense week in volume and volatility, the markets tend to take a nap and calm down without giving any direction to the market. So, if we don’t have any additional events, I rather expect a quiet week, without any clear direction to give the market time to breathe! So we might as well take advantage of this week to secure our cryptos and NFTs!