Technically Analyzed – November 29th, 2019

This content can be found in summary in the newsletter for this week.

BTC

After four red weekly candles, there is definitely room for some relief this week and possibly next. Four red weeks in a row has only happened a few times in BTC history. The post-Gox crash is probably one of the only times there were more than four red weeklies. Near the local lows earlier this week, bull divergences could be seen on lower time frames (4H, 8H, 12H) for the first time in a month. Spot markets also showed larger than average buying volume as soon as the price went under $7,000. Price has seemed to have found a local low and has rebounded. The question is how to treat the bounce from $65xx. What is the likely outcome over the next few weeks? Does the market consolidate within a range? Will a new local low be made? Bull revenge and back over $9,000? What is most probable?

weekly

The weekly chart is pretty clear. 7630-8050 is a huge level and it is pretty unlikely that it’ll get run over so easily. It was around $8100 where selling began to accelerate last week. If price manages to get drawn close to this area it would be wise to start getting cautious. In order to paint a bullish picture, the weekly needs to get back over 8300 within the next two weeks or so. However, after four weeks of straight drilling, it’s more likely that price will range for some time. If selling momentum picks up again, and price makes a new local low, there are only really two weekly levels of any significance. $6000-6100 is the bottom of the 2018 range which may offer some support. Otherwise, it’s very likely that there would be strong buying interest in the $5xxx area given it was a huge consolidation area after the breakout from $4200 this past April.

DAILY

On the daily, there are a few areas of interest. If 7300 holds this week, at the very least we may see a ranging market for another week or two. $7700 is also an important level given that it was the range low from late September to October. At the time of writing has acted as fairly strong resistance. If price manages to move past this level, other areas of interest are $8050-100, where price broke down, as well as $8500 which is the range high from September and October.

If price were to make another move downwards in the coming months, there aren’t many level in the $6xxx area that would offer much support. The move through $6xxx in May earlier this year was an explosive one. The only remaining untested daily levels are in the $5xxx region where price consolidated for nearly a month.

H4

For the first time since the down trend began in October, levels have begun to flip on the H4 chart. $7300 was the first level to flip and over the last day or two, price has been ranging below the next resistance area at $75-7600. If bulls manage to flip this level, it is likely that price will move up towards $8100.

OPEN INTEREST

Open Value (OV) on Bitmex XBTUSD perpetuals has greatly unwound since the move under $7,000. At the time of writing, currently around 83,500BTC, down from about 108,000BTC at the peak.Typically the market has not made any big moves until oven value is around 100,000 BTC. Watching how OV reacts to price action over the next week or two should help give some clues as to where big money is positioning.

ETHUSD

Similar to BTC, this week will likely show some relief. ETHUSD also had some divergences on lower time frames. However, the macro structure remains bearish since the yearly high in July. There have been clear support / resistance flips the entire way down. From here, ETHUSD is unlikely to sink to new lows unless BTC does. At the moment, a neutral / bearish market view remains. With BTC likely rebounding this week, ETHUSD should follow suit. On the high end of the spectrum, BTC is likely to hit major resistance around 8100 and 7500 on the low end. If the ratio doesn’t make any big moves up or down, that lines up fairly well with ETHUSD resistance areas (157, 170 assuming the ratio is around 0.021).

ETHBTC

With big moves down across the market, the ratio fell with ETHUSD. This does not show strength. BTC is obviously leading the market — but if there was any divergence, ETHBTC should at least remain somewhat flat.

There are quite a few low cap ALTs making big moves over the past week. Most of these have thin books and are fairly easy to manipulate. There’s not much reason to get excited with ALTs unless you see big caps making significant moves.

Similar to ETHUSD, macro structure remains fairly bearish on high time frames for the time being. Last week’s close shows potential bearish continuation. The weekly from early October wicked into previous support–now resistance. The last two weeks failed to make a higher high, and finally printed a big red engulfing. Comparisons can be made to February of this year.

If the ratio starts to break significant resistance levels and make big gains, it’s time to start paying attention. Until then, BTC is running the show and continues to outperform. There are a lot of fundamental events lined up in the coming weeks and months. How or if they will affect price action is an unknown.

–big thanks to Kevin