Another week full of bullish news for bitcoin and altcoins! While markets remained stable some questions were raised around NFTs. All in all, a normal week in crypto, let's get to it!
With a crypto market overall stable week-on-week, Bitcoin and altcoins made significant moves in the last 7 days. Bitcoin moved to $25,000 on Tuesday before sliding down below $24,000 as of press time. Bitcoin Dominance also decreased as altcoins outperformed the leading crypto, but more on that in our Technical Summary!
Will Layer-2 chains lead to mass adoption of crypto? At least for now, some layer-2 like Arbitrum are surpassing Ethereum daily transactions. Google is becoming a validator on the Tezos network, enabling its corporate users to deploy web3 applications on Tezos. Blackrock is showing there are many channels to crypto adoption with a new Metaverse ETF.
Hong Kong is showing strong signs it wants to become China’s leading crypto hub with a new regulation. Yet, at the Barcelona Blockchain Conference, regulation was in every discussion showing signs the industry’s desire to regain the trust of investors after 2022. A big question was raised in the US : are NFTs securities?
A new kid is entering the layer-2 game! Coinbase just announced the launch of Base, an Ethereum layer-2 network that will host the crypto giant’s on-chain products. Following last week’s Bitcoin Ordinals growth, it’s Litecoin’s turn to get its first NFT. Development is not going to stop anytime soon either as developer activity on public Github crypto repositories shows strong activity meaning one thing: it’s buidl time!
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If we were just checking the weekly candle on the Bitcoin chart, then the body would be thin as the price remained pretty stable. Zooming in on the daily chart volatility was back as many technical indicators like Puell Multiple or the DCA Indicator turned bullish this week. Earlier this week, The BIS General Manager said "cryptocurrencies have lost the battle" against fiat but investors remain largely bullish as the Funding Rate remains over the last 10 days.
The 1H chart provides a higher resolution visual of how this daily corrective price action has formed, with daily sideways ranging candles made up of LTF trend flipping, where both highs and lows are constantly raided, with no true commitment to any one trend direction.
Now that we've seen the extreme 1H bearish order block mitigated with a potential manipulation pattern, and seen it lead to a move back down to below 1H sell-side liquidity, we are waiting for price to commit to a given direction.
Being below the 1H EMA after retracing into premium prices and now with the 50 EMA acting as resistance, we will likely see price squeezed around $24,000 before a big push one way or the other takes place.
After a huge start to 2023, BTC spent most of this week consolidating sideways as liquidity is generated on either side of the current price, which we would anticipate is being built ready to fuel our next directional move.
After price took the 1M buy-side liquidity, the aggressive buying shown by the bullish run-up has been met by selling pressure, either through new sellers seeing the current price as value for at least a retracement or buyers previously positioned long now taking profits.
It wouldn't be out of the ordinary for BTC to retrace in the coming weeks, which would be healthy for price action. We could see a short-term retracement to the $21650 price level, finding support at the daily 50 and 200 EMAs, or we could break lower, raiding 1D sell-side liquidity and targeting discounted prices, for the subsequent accumulation.
Alternatively, if the selling pressure is not strong enough and has been exhausted, a run on the highs formed at $25,000 would be likely, tapping into the bearish order block that was associated with the 1M buy-side liquidity level.
It's worth noting that we've now had our golden cross on BTC, which has continued to sustain and is beginning to diverge; the longer we stay bullish, the more likely this macro signal becomes; alternatively, a bearish run now could mean a death cross.
Altcoins sentiment remained positive this week as the sideways consolidation period continues. Despite this relatively low volatility period, some altcoins experienced huge price moves this week, many of which came following big announcements like for ANKR & Microsoft. OP rallied following Coinbase’s announcements stating it would use the Optimism stack for its own layer-2 solution.
The story on ETH this week is fairly similar to that on BTC, price has continued to correct sideways, albeit closer to the previous accumulative PA the last few weeks than BTC.
The golden cross is currently sustaining with divergence continuing, with all eyes on whether it will continue to diverge or if it was just a ploy to fuel buyers before the next bearish leg into at least the $1350 price levels.
Price is signalling that bearish prices are likely to be seen, given the potential manipulation pattern we are seeing, along with the price failing to close above the previous high formed on each consecutive raid as signals of buying consistently met selling pressure.
Moving forward, we would expect a healthy retracement before the next bullish leg, which could be a short retracement to the $1500 price level, or as deep as the $1350 price level, which would reach discount and close the open daily fair value gap.
Alternatively, if bulls are in control, we keep pushing higher.
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