With all the macro news in TradFi, but also in the crypto space, it makes sense to start with a zoomed out view and then work our way into the shorter time frames.
Yes, we are in a bull market, and so far nothing points in the direction of a swift change.
But a potential pattern (called a rising wedge) might be in the process of being built. To be more certain of this, I would need to see three touch points on both legs of the wedge. Additionally, I would need to see decreasing volume on the way up, and a large increase in volume when we break the lower leg of the wedge.
A rising wedge is not a trend reversal pattern. So, my target to the downside is somewhere in the range of $44-50k.
I am also monitoring the derivatives market. Especially the funding rates on perpetual and the term future basis. We have seen a constant widening of the term basis year to date (with BTC$ price moving from $20k to almost $62k). This is also nicely displayed by the annualised rolling 3mth basis at skew.com.
By the way, there are several good articles and podcasts around that try to explain the nature of that basis and what the drivers are: DM me if you need more info).
Returning now to the basis in terms of my technical chart analysis, I would like to point out that the market is stretched and to me it feels like the market needs a breather or the chance to reset before we print a new ATH.
Now, let’s zoom into the 4h chart:
Here we are already seeing some choppiness with the Ichimoku cloud flipping back and forth (bullish/bearish).
What is clearly visible ever since we hit the high of $62k is the strong selling interest in the spot market at the $60k level. Every time we trade up to the $58-59k level, those large sell orders show up on pretty much every exchange.
In terms of the short term, this is the level I watch on the upside in combination with those large sell orders (if they actually get eaten up by the buyers, or if I see them shy away).Read more