Market Review: Monday 3rd July 2023
BTC & alts, what to expect in the coming weeks…
BITCOIN
Bitcoin has rallied over the past months, however, it is important to note that it has been on a downtrend since November of 2021 all the way to November 22. That is one year of downtrend. Since November 22, December and onwards BTC has been in a consolidation phase and then a rally.
The important question to ask ourselves is: Is price in a resistance level at range highs or are we going to get a break through and trade all the way up to 35-37k USD. Trading is about making an educated guess, so we have to be opened to that possibility but does that mean that BTC is in a bull market? I do not think so. Bottoms take time to form, specially after a significant sell off and this is the first compelling rally that BTC has had since the big sell off.
I still believe there will be a deeper correction for BTC and I think we will head into recession. However, that may not play out until later this year — november 23 — or even next year — Jan 24 — .Considering the macro, there is still some risk to the downside for markets, specially risk on assets.
Bitcoin is still in a consolidation phase
BTC has been trading in the same range for over a year. Quite often, price consolidates within a range before there is a breakout into a full on bull run.
We got two range highs: One around 32.4k USD and the latest swing high at 31.4k USD. Until now, there hasn’t been acceptance above 31.4k USD, so far there has been four failed attempts to consolidate above this level.
BTC Trading Scenarios:
Scenario 1: Short
The short set up for this trade has to be the following: either price goes to 32.4k and and comes back down. Or if there is acceptance above 31.4k USD and price goes after the “higher” range high at 32.4k USD and there are several attempts of accpetance and rejection.
Scenario 2: Long
On the contrary, the long set up for this tarde is the following: if buyers are stepping in at 32.4k USD and market orders are opening aggressively and longs start to pile up at this level, then a long would be the move.
There are no major support or resistance levels above 32.4k, meaning not a lot of volume was traded here because price fell sharply. If price breaks out it will go very quickly through this level. If longs are more aggressive than shorts and shorts get squeezed out, then it is really not going to take much to push price higher into the 35–37k USD level.
Nonetheless, I wouldn’t be to bullish if there is rejection at the 32.4k level or higher. If price just wicks and get slapped back into the range I would take a short. I would look for a consolidation of price and deviation to enter and close around the previuos range high at 32.4k USD and possibly the mid range around 28k USD. However, if there is consolidation above 32.4k USD and another breakout get out of that short and look for a long entry.
The only long scenario that I am looking for right now is a rejection of 31.4k USD, price goes back to 28k and then push to 32.4k. Entry at 28k.
On alts…
I still think alt coins will trade lower down, not rulling out a short squeeze first to the range high. I dont think I am necessarily bullish at the moment. I could see in the next few weeks/months market cap coming back down. This is where I want to start thinking about positioning myself into alt coins for that alt coin bull run. However, we know historically that alts only go up higher once BTC has made a significant move or is in a bull market.
There is still time before BTC enters a bull run environment, so use this time wisely to do your research on the project behind alts. In terms of alt coins, I am not a huge fan personally. Most coins can be very deceiving and get very hyped for no reason. Therefore, it is important to segregate the technology aspect of it with the coin itself.
When you got an SME looking to use the ETH blockchain it doesn’t necessarily mean that they are going to be dependent on the alt coin which is ETH. They can take the ETH blockchain and host it as private node on their own centralised servers. They dont need to be a part of the “public” or decentralised ETH ledger. So you have to remember that. These coins sometimes are not a direct representation of the company or the technology behind it.
That is why I am not married to any of this alt coins. Yes, the tech is fantastic, but after all, people can take the tech host it as a private chain, then what happens to the coin then? It doesn’t serve any purpose!
Everybody gets excited about their coin being the next big thing since sliced bread. A classic example is Polygon (MATIC), they did a partnership with Disney and everyone got excited. Although, is that the MATIC blockchain itself or just pure marketing? What purpose does that serve to you if you are holding the token? You are not going to get free tickets to see Mickey Mouse at Disneyland are you?
When I look at market structure for most of the alts, nothing scream to me go long. The crypto market is in an accumulation period into the next significant rally. So do your reasearch and take advatege of the narratives of these coins to position yourself for the next bullish swing trade at least to the next significant swing level.
I hope this information was useful!
Love & Light,
Mariana
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