30 März 2021

TA Tuesday: The medium term outlook for BTC

Patrick Heusser

Patrick Heusser

Head of Trading bei Crypto Broker AG

Über den Autor

BTC$ (4h)

My imagined scenario from last week kind of played out. But we never reached the range where I was looking to add some longs.


And I forgot the most important thing when doing the risk/reward analysis from a chart. Asking what big picture trend are we in? Yes, in a bull market.


The correction after we broke out of the rising wedge was rather shallow, which makes total sense in an overall bullish market. It only took three days to march $8,000 south.


Currently, I see the $55k level as the neutral zone, and also the preferred price to add some more longs. But with current price actions I doubt we will go there (short term).


On the topside, we are seeing some resistance at the $60k level. Most of the larger exchanges have sizeable sell orders up there. They also seem sticky, so we need real buying to clear them.


As far as the medium term outlook is concerned, I expect to see some range trading between $50-$60k. With a special focus on the derivatives market when we approach the outer band of the range. Currently, it looks stretched again, with perpetual funding on the high side and the term basis above the 20% 3mth rolling rate.


Also, the thing to watch is the potential unwinding of the GBTC arb trade. Yesterday was the maturity of the previous lock-up period. If the initial arbitrage trade was structured through USD funding then the unwind would be to sell GBTC shares in the secondary market and buy back the BTC futures.