Victor Cobra's Crypto Market Update - 11/29/19
I recorded a 15-minute overview of the market today, but the whole thing came out glitchy, so instead I'll have to make a written post. There really hasn't been much in terms of positive price developments within the cryptocurrency market of late. As I explained in a rather long post recently, I don't think cryptocurrencies can really provide positive change for our global economic system in their current state. That doesn't mean I don't think they can in the future. It just means I think there are bigger issues with our socioeconomic system that need to be tackled first. In any case, the crypto market has tested some lower levels, but we bounced right off the bottom of the downtrend channel. That was where I was expecting the next bounce, so that played out pretty well. Not only that, but Bitcoin experienced a fakeout BELOW the channel, which I saw as at least short-term bullish. I wrote about this in my most recent Bitcoin update. I also talked about a bounce off this long term support line on the BLX chart, which also played out beautifully. 
Today, Bitcoin is finding resistance right at the previous support from the falling wedge. If we can break back above that, it would be a pretty strong buy signal, and I think we could head all the way back up towards the 8.8K level, and perhaps the downtrend channel resistance. However, if we continue to find resistance here, the market can easily roll over back to the downside. The total cryptocurrency market cap has sustained a breakdown below its long term trend. This is NOT what I was hoping for, as it means we can go sideways or down for as long as the market needs to, until a new trend is formed. I don't think we are really in a bear market...but I also don't feel like we've really begun a "bull run." We'd need to see the next higher high for the market, which could take quite some time. My next projected level for the total crypto market cap is in the $500 Billion realm. However, our breakdown below the long term trend seems to have decreased the chances of that happening any time soon. If we are to expect higher cryptocurrency prices, I'd first want to see Bitcoin break decisively above the downtrend channel resistance, plain and simple. On the weekly, we're back above the 50 and 100 Moving Averages, which is a good sign...but we need to at least hold this area through the weekly close.
Looking at the total crypto cap, we've held the REALLY important 180B area. In my recent videos, I kept talking about a potential drop down there, as well as to the bottom of the bearish channel. That's exactly what has happened. I really want to see the market continue to hold that immensely important horizontal support zone, if I am going to slowly regain confidence. I also want to see us close the weekly above the 50w MA. As of now, things still look fairly weak until we can get back above the really important 2230B level for the market.
Alts have some interesting symmetry going on.
What's a bit promising is that the altcoin market cap has held this important horizontal level despite Bitcoin continuously testing lower levels. The uptrend channel from earlier this year also ended with a rejection above the top, just as Bitcoin just made a false breakdown below its current bearish channel. Technical analysis is a strong tool that connects visual analysis with psychology. Many people looking at this chart will probably assume we need to test some of those bear market lows. This would mean potentially sub $100 Ethereum and sub $30 Litecoin again. I'd be careful of this reasoning...simply because symmetrical patterns like this are a bit too obvious. It's also interesting that alts haven't tested the bottom of their downtrend channel, which tells me that bears are a little less aggressive when selling alts right now. We can even see that the recent buying volume for alts as Bitcoin touched $6500 the other day was the largest amount of clear buy volume we've seen in this chart's existence. That's observable on the daily timeframe:
Although this is encouraging, alts really need to break that $70-80B pesky resistance zone to look more bullish. Ethereum is actually now in what could be a bullish descending broadening pattern. Broadening patterns seem to have a fairly high probability of success in this market, moreso than falling or rising wedges. This is just based on my personal experience, so maybe I'm wrong. But here it is anyway. 
You can see that sell volume actually continued to decline, at least until we dropped below the important $150 horizontal support level. But now we're back above it, with a fairly decent buying reaction. If this pattern continues, Ethereum can actually head all the way towards the 200d MA (around $213 now). Even the 200d MA is starting to curve down though, so this will need to play out very soon. As long as ETH can close the weekly above $150-153, I think there's a chance this could happen. Let's look at Bitcoin dominance as well, since things are starting to look a bit worrying on that front.
Bitcoin dominance is casting a bit of a shadow on alts at the moment, since it's not entirely clear whether or not it wants to make a new high or if it's still in the process of topping out. I haven't talked about Bitcoin dominance in a while, but it appears to be trying to break out of a wedge. The oscillators are showing that it can get rejected here, though. So I'd be careful about assuming weakness, when perhaps this is still part of the bottoming process for alts. It's really hard to say. It can break out here and continue the trend, but it's in a longer term rising wedge pattern, which we can't really expect to sustain forever. What I also want to see, to confirm a breakdown in dominance, would be a decisive move below the 200w MA, which hasn't really happened. In fact, it's actually trying to hold above the 200w MA for the first time ever.
Overall, my outlook right now is still for slower growth across the cryptocurrency market. I posted about this a while ago, when valuations were substantially higher. So far, the slow growth scenario has played out the way I originally expected. Even if Bitcoin manages to break the downtrend, I have doubts as to whether it'll be able to crack the high from June. Instead, I think we can trade in a range for a couple of years at least. This is also because I think the stock market is primed for a massive correction at any point, which could last many years. I'm thinking maybe something like one of these two scenarios for Bitcoin, assuming the low is set:
If the low is NOT set, Bitcoin can head down towards the 200w MA again. I think this is only possible if we have a sustained breakdown below the downtrend channel right now. Here, I have all the important levels for Bitcoin marked.
After my bearish post, we did end up seeing a drop and some buying action occur within my pink circle. Time will tell whether or not we will have to test 5K levels. As long as we hold above 6K, I think we have a chance for a bull market to start emerging within the next several months.
I know this post may seem a bit confusing and long-winded. And that's because the market is still in a decision zone, with a lot of things that must happen in order for me to regain more confidence. There is no clear medium-term direction, aside from the downtrend channel - which says down. Long term, Bitcoin has just held a very important trendline on the BLX chart, as noted in the beginning of this analysis. So perhaps we can start slowly grinding up here. Right now, the market is favoring the short term trader and not the long term investor. This makes it hard for people like me who only trade on occasion to want to continue paying attention. I will continue to provide updates, but this is the busiest my life has been since I first got into crypto at the end of 2017. Unfortunately if things don't get going here soon, it'll be both easy and necessary for me to stop paying as much attention to this market.
Anyway, thanks for reading! This is not financial advice. This is meant for speculation and education on market observation. It is not a recommendation to buy or sell. Trade at your own risk, and consult a professional financial advisor.
-Victor Cobra
Today, Bitcoin is finding resistance right at the previous support from the falling wedge. If we can break back above that, it would be a pretty strong buy signal, and I think we could head all the way back up towards the 8.8K level, and perhaps the downtrend channel resistance. However, if we continue to find resistance here, the market can easily roll over back to the downside. The total cryptocurrency market cap has sustained a breakdown below its long term trend. This is NOT what I was hoping for, as it means we can go sideways or down for as long as the market needs to, until a new trend is formed. I don't think we are really in a bear market...but I also don't feel like we've really begun a "bull run." We'd need to see the next higher high for the market, which could take quite some time. My next projected level for the total crypto market cap is in the $500 Billion realm. However, our breakdown below the long term trend seems to have decreased the chances of that happening any time soon. If we are to expect higher cryptocurrency prices, I'd first want to see Bitcoin break decisively above the downtrend channel resistance, plain and simple. On the weekly, we're back above the 50 and 100 Moving Averages, which is a good sign...but we need to at least hold this area through the weekly close.
Looking at the total crypto cap, we've held the REALLY important 180B area. In my recent videos, I kept talking about a potential drop down there, as well as to the bottom of the bearish channel. That's exactly what has happened. I really want to see the market continue to hold that immensely important horizontal support zone, if I am going to slowly regain confidence. I also want to see us close the weekly above the 50w MA. As of now, things still look fairly weak until we can get back above the really important 2230B level for the market.
Alts have some interesting symmetry going on.
What's a bit promising is that the altcoin market cap has held this important horizontal level despite Bitcoin continuously testing lower levels. The uptrend channel from earlier this year also ended with a rejection above the top, just as Bitcoin just made a false breakdown below its current bearish channel. Technical analysis is a strong tool that connects visual analysis with psychology. Many people looking at this chart will probably assume we need to test some of those bear market lows. This would mean potentially sub $100 Ethereum and sub $30 Litecoin again. I'd be careful of this reasoning...simply because symmetrical patterns like this are a bit too obvious. It's also interesting that alts haven't tested the bottom of their downtrend channel, which tells me that bears are a little less aggressive when selling alts right now. We can even see that the recent buying volume for alts as Bitcoin touched $6500 the other day was the largest amount of clear buy volume we've seen in this chart's existence. That's observable on the daily timeframe:
You can see that sell volume actually continued to decline, at least until we dropped below the important $150 horizontal support level. But now we're back above it, with a fairly decent buying reaction. If this pattern continues, Ethereum can actually head all the way towards the 200d MA (around $213 now). Even the 200d MA is starting to curve down though, so this will need to play out very soon. As long as ETH can close the weekly above $150-153, I think there's a chance this could happen. Let's look at Bitcoin dominance as well, since things are starting to look a bit worrying on that front.
Bitcoin dominance is casting a bit of a shadow on alts at the moment, since it's not entirely clear whether or not it wants to make a new high or if it's still in the process of topping out. I haven't talked about Bitcoin dominance in a while, but it appears to be trying to break out of a wedge. The oscillators are showing that it can get rejected here, though. So I'd be careful about assuming weakness, when perhaps this is still part of the bottoming process for alts. It's really hard to say. It can break out here and continue the trend, but it's in a longer term rising wedge pattern, which we can't really expect to sustain forever. What I also want to see, to confirm a breakdown in dominance, would be a decisive move below the 200w MA, which hasn't really happened. In fact, it's actually trying to hold above the 200w MA for the first time ever.
Overall, my outlook right now is still for slower growth across the cryptocurrency market. I posted about this a while ago, when valuations were substantially higher. So far, the slow growth scenario has played out the way I originally expected. Even if Bitcoin manages to break the downtrend, I have doubts as to whether it'll be able to crack the high from June. Instead, I think we can trade in a range for a couple of years at least. This is also because I think the stock market is primed for a massive correction at any point, which could last many years. I'm thinking maybe something like one of these two scenarios for Bitcoin, assuming the low is set:
If the low is NOT set, Bitcoin can head down towards the 200w MA again. I think this is only possible if we have a sustained breakdown below the downtrend channel right now. Here, I have all the important levels for Bitcoin marked.
After my bearish post, we did end up seeing a drop and some buying action occur within my pink circle. Time will tell whether or not we will have to test 5K levels. As long as we hold above 6K, I think we have a chance for a bull market to start emerging within the next several months.
I know this post may seem a bit confusing and long-winded. And that's because the market is still in a decision zone, with a lot of things that must happen in order for me to regain more confidence. There is no clear medium-term direction, aside from the downtrend channel - which says down. Long term, Bitcoin has just held a very important trendline on the BLX chart, as noted in the beginning of this analysis. So perhaps we can start slowly grinding up here. Right now, the market is favoring the short term trader and not the long term investor. This makes it hard for people like me who only trade on occasion to want to continue paying attention. I will continue to provide updates, but this is the busiest my life has been since I first got into crypto at the end of 2017. Unfortunately if things don't get going here soon, it'll be both easy and necessary for me to stop paying as much attention to this market.
Anyway, thanks for reading! This is not financial advice. This is meant for speculation and education on market observation. It is not a recommendation to buy or sell. Trade at your own risk, and consult a professional financial advisor.
-Victor Cobra
Publications connexes
Clause de non-responsabilité
Les informations et les publications ne sont pas destinées à être, et ne constituent pas, des conseils ou des recommandations en matière de finance, d'investissement, de trading ou d'autres types de conseils fournis ou approuvés par TradingView. Pour en savoir plus, consultez les Conditions d'utilisation.