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Bitcoin Monthly View
Historical post-Death Cross retracements across time, along with downside wicking below the 200-week MA produce a confluent support/bottoming out zone that is denoted by the green box on the chart.
Right now, BTC is resting at a major ~$20000 support, which is essentially the Range Low of its $20000-$28800 range.
Below the Range Low however are located ~$17000 and $13900 Monthly supports.
Theoretically, those are Monthly levels that could be tagged in some volatile way but generally speaking there is not much left for BTC to finally produce a generational bottom.
The green area suggests that, as historical bottoms have occurred in this analogous bottom here.
With BTC resting at the $20K Monthly support, under the 200-week MA, this is going to cause price compression to precede the next major move.
I’m not looking to trade the next move.
The way I see it is that I’ll be accumulating more for the long-run via my Dollar-Cost Averaging strategy if we go lower.
And if BTC actually manages to relief rally, then I’ll understand that this movement is a function of draining the clock in terms of time before the Halving.
Because BTC is now some ~650 days prior to the Halving and historically price has bottomed out 517-550 days pre-Halving.
So BTC still has time to do whatever it needs to do before firmly registering that bottom, at least in the context of time prior to the Halving.
I talk more about this regarding Ethereum later on.
Altcoins On The Cusp Of Further Downside?
Ever since the Altcoin Index broke down from the blue support region, ALTPERP has been consistently tagging the orange level.
In May, this orange level was tagged as support but to little subsequent follow-through in June.
In fact, the follow-through was so poor that ALTPERP Monthly Closed below the orange support.
This month of July, ALTPERP may be turning this level into new resistance, in which case rejecting from there could set ALTPERP for a further decline of -30% towards the next available orange support at 1115.
ALTPERP reclaiming the orange 1660 level as support and Monthly Closing above the orange level would invalidate bearish bias.
Interestingly, Bitcoin Dominance is in a similar technical predicament, whereby BTC.D Monthly Closed below a key support (Red) which may now be figuring as new resistance this month:
Should BTC.D flip this red level into new resistance, rejection via the blue path would take place.
What’s curious about this is that a declining Bitcoin Dominance could mean money would flow either out of Bitcoin into fiat or out of BTC into Altcoins.
But if the drop in BTC.D is sharp and quick, ALTPERP could see a jump, but if it is unable to Monthly Close above that key 1660 level, ALTPERP would’ve just relief rallied into resistance, producing a long upside wick in the process.
Alternatively, should BTC.D follow the orange path, this is where ALTPERP will actually likely see a rejection and decline, most likely.
Key levels are outlined and reclaiming them or failing to do so will dictate sentiment and bias.
Ethereum - Is The Bottom Near?
Ethereum has retraced -81% thus far, which is theoretically and average Ethereum correction compared to previous -72% and -94% Bear Market corrections.
In terms of % depth, ETH is definitely close to a bottom, with scope of an additional -10% or so being possible, if history is to repeat with a deep correction.
But in terms of timing prior to Bitcoin Halving events (blue vertical lines), ETH is arguably still far away from a bottom.
ETH bottomed 274 days prior to BTC Halving 2 before beginning a new macro uptrend.
ETH bottomed 517 days prior to BTC Halving 3 before beginning a new macro uptrend.
And if ETH were to bottom 517 days before Halving 4, the bottom would occur in November 2022 which is still some 4 months away or so.
And if ETH were to bottom 274 days before Halving 4, the bottom would occur in July 2023.
Granted, we have only two data points to work with, which is by no means an ideal data set to work with; the point here is to at least illustrate some modicum of expectation for a timing of the ETH bottom.
Right now, ETH is down -81% but there are approx 670 days to the next BTC Halving:
In terms of retracement depth, ETH is close to a bottom.
In terms of time prior to the BTC Halving, ETH is not close to a bottom by historical standards of previous bottoms occurring 274-517 days pre-Halving.
So in reality, the bottom will be a combination of both retracement depth in terms of % and time prior to the BTC Halving.
So, for the sake of discourse, let’s say ETH hits the -94% retracement mark over the coming weeks - in this case, it will be likely that a bottom will have occurred much sooner in terms of time prior to the Halving.
But if ETH instead enjoys a period of extended consolidation or an extended relief rally before further downside over the coming weeks and months, this will essentially “drain the clock” towards the Halving.
And since we’re 670 days pre-Halving and ETH has historically bottomed 517 days pre-Halving at the earliest, ETH needs to “waste” around 150 days before bottoming.
Perhaps ETH needs to be uneventful in its price action for the next 5 months before a firm bottom is established, which would tie in with that November 2022 bottom idea mentioned earlier.
In my mind, signs of consolidation and/or relief are going to prolong the bottoming out process but should ETH retrace sharply once again, historical % depth will be the main factor that brings the bottom closer.
Thank you for reading.