CC #109

It’s been a good run since the last post, the ‘pockets getting bigger.’

Sep 23, 2024

Where are we now?

Bitcoin remains in a bearish trend on the daily but the steps are being taken to change that. Risk exposre in the market has taken its first bullish rotation in a while. Retail sentiment has finally shifted to bullishness.

What does all that mean?

There is light at the end of the tunnel. The larger-scale bull market is still on and looks to have weathered the worst of the storm. The market is building up a decent base for a short to meduim term bullish run. Perhaps we are nearing the start of the final rally of the year.

Let’s observe the latest changes in 4 key market metrics.

Total Market Weekly Structure

https://www.tradingview.com/chart/FEeyCH3q/

New changes!!
Last modification July 15 2024:

By my rules, the weekly structure trend is still bearish. Above the chart shows we had a bully rally and closed high enough to confirm support us at 1.904T.

We now have a low point at the turn of 2022- 2023, to a high point in March 2024 to a higher low in early September. The baby steps of a bullish trend. Next we neet to close above 2.617T to confirm the trend shift.

Total Market Daily Structure

https://www.tradingview.com/chart/25yQcZV1/

New changes!!

Last modification Aug 31 2024:

The daily structure has shifted to bearish illustrated by the high in March, a low in early August, a lower high resistance in late August at 2.216T, and the lower low close in early September. Since then however we have rallied enough to confirme a new market structure support at 1.862T.

We will continue monitoring retracements anchoring from lows of early September as the possibile starting point for a new shift.

As a reminder this daily bearish trend shift also occurred during the previous market cycle. However, it didn't result in significantly more downside than what had already taken place so it’s not very concerning at the moment.

Crypto Money Flow

https://www.tradingview.com/chart/E249oVQY/

New changes!!

Last modification Aug 31 2024:

The starting point for the latest rotation on the Crypto Money Flow chart has been updated: September 6, 2024, at 20:00 UTC, as seen above.

In the image below we can see how this rotation has played out. Stables have steadily lost capital as risk appetites increase. The segment right of the white line shows BTC and ALTs gaining in traders allocation. Next, the right of the orange line shows BTC increasing with stables on the minor dip middle of this month. BTC was bought up. Finally, right of the grey and fuchsia line the BTC gains were rotated into ETH and ALTs marking the final phase of the rotation. Now we wait for the ALT profit taking and for BTC and Stables to increase again to show the beginning of a new cycle.

BTCUSDT_2024-09-23_12-15-12_35206 copy.png

Additional Crypto Metrics

Retail sentiment has rallied back over the midline. Traders are back to being bullish. It wouldn’t be out of the ordinary to see a testing of the midline on a price retracement over the next week or so.

The Market Validity Score has rallied well out of the lower extreme. Assets across the market are nearing a majority bullis stucture. It would be wise to scroll through and look for assets breaking out of resistances over ones still at lows as they are the better assets to trade with momentum.

What do we do with this information?

My short-term intentions haven’t shifted much from the last post but just may in the next one or two.

My money rotation interpretation shows we have played through a full market rotation from Stables to BTC to ETH & ALTS.

This week, with BTC and ETH being near the tops of the range I posted last week ($55K to $65K and $2200 to $2800, respectively) I’m not really looking to get into new long exposure. I’m taking profits on stuff bought at the bottom and puttin in trailing stops.

I’d consider ALT breakouts from current levels and evaluate larger dip buying positions if/when BTC returns to 60K and holds that level.

My long-term horizons are unchanged and I anticipate higher prices at the end of the year. The crypto market typcially endures a bearish season this time of year as shown by the blue trend line in the chart below. We have two just one more week of historic bearishness than strong bullish tailwinds. Next quarter may see the second best rally of the year.

This year BTC has very accuratly followed the seasonal path week by week over 75% of the time.

Also on the daily chart it has signal a bullish trade based on bullish divergence. Initial target is around 74K and secondary target around 84K. This aligns with my exepctations for pricing on the market top this year. Again this year, same as the 2021 bull run, I’m not expection +100K before the years end.