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
As expected following a sharp drop with the announcements around FTX, the market had a very quiet week with a price contraction. It is rare to see sharp movements from one week to the next and this is indeed a break in the lull.
On the other hand, something very interesting happened this week. Not in terms of prices or the market, but in terms of the population involved.
Indeed, the networks Twitter, Telegram or Discord, seems to lose activity especially in the cryptocurrency sector. It would seem that the FTX case is finished the remaining gladiators and that it will take a good while or a bullish movement to see the deserters appear again!
This can be an excellent indicator of the state of the market, especially since the media, which is not specialized (not at all considering the information transmitted) only talk about the death of cryptos. Let’s take a look at the next steps that could happen this week!
Analysis of the week
The chartist pattern that is taking place is not a good omen, usually a compression that follows a decline or an increase is a continuation pattern. Since in this case, we have just fallen, we should have a new fall whose movement would be equivalent to the first.
We can see, in this case, that the continuation pattern has a target above $10,000. This seems unlikely, as we have two support areas where we should see a reaction at $14,000 and $12,500!
Finally, $12,000 should also serve as the final bastion since it is THE big pre-bull run volume support area.
Moreover, this is accentuated by two important points. The first is the accentuation of liquidations on Bitcoin towards the SOUTH highlighted by the KingFisher tool:
This shows that since last week, liquidations at SUD are piling up, which is not a good sign.
The second point is the amount of positions opening up in altcoins as well as their type.
Indeed, here, we observe that the Open interests (second curve – representing the number of positions that open) does not cease to increase, while at the same time the fundings are in growth to return in the positive without liquidation. The conclusion? Leveraged buy positions are opening up! Creating liquidity in the SOUTH and thus accentuating the phenomenon created by Bitcoin in point 1.
This one is pretty clear, unfortunately for this week. The increase in long positions adding liquidity for exchanges in the SOUTH seems to be a sign of a bearish continuation.
I hope I’m wrong, as I’m a little tired of “buy the dip” more and more, but we’ll do our best! On the other hand, the desertification of the interested parties around the ecosystem as well as the media highlighting (as at the market TOP) thanks to more than dubious interventions shows a proximity of the bottom. Will we need a final bearish push? Possibly, the following weeks should confirm it.
Beware however for those who would like to bet on this decline, the most likely movement for this week and the light liquidation to the NORTH before the breakout as follows:
Be careful though, don’t take a short term position without risk management knowledge and just on someone else’s advice! Remember, since the market decides everything, it always wins. In the meantime, continue to educate yourself and discover other crypto projects.
Entrepreneur & Dad, passionate about cryptocurrencies, I describe for you the technical analysis.
My job: look at charts and interpret them for you.
Beware I do not know all the truths.