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Get ready for an enlightening journey as we analyze the current state of the market and equip you with invaluable insights to make well-informed decisions.
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Table of contents
- Market Heatmap and Fear and Greed Index
- US500, DXY and Gold Analysis
- USDT.D, Bitcoin and Ethereum Analysis
- Quotes / Advices
- Closing Remarks
1. Market Heatmap and Fear and Greed Index
To initiate my research, I always start by examining the market heatmap, which provides a swift overview of the entire cryptocurrency landscape. Over the past week, BTC has shown relatively stable trading within a narrow 1000 range, leading to a somewhat uneventful period.
Conversely, some altcoins have capitalized on this opportunity and utilized it to bolster their positions in the market.
Furthermore, for the third consecutive week, the Fear & Greed Index continues to hover in the neutral zone, suggesting a sense of stability prevailing in the market.
It is essential to highlight that prolonged periods of low volatility, like the past two or three weeks, are often followed by notable price movements. Hence, it is wise to stay vigilant and be ready for potential shifts in the market.
2. US500, DXY and Gold analysis
As the crypto market and the stock market exhibit a strong positive correlation, we diligently track the US500 index, which serves as a fundamental barometer of the overall market sentiment.
“S&P 500 Index, also known as the Standard & Poor's 500 or the US500, is an American stock market index that tracks the performance of the top 500 companies listed on the Nasdaq Stock Market or the New York Stock Exchange.”
As mentioned in the previous week's analysis, the US500 was positioned near a robust rejection zone, formed by the convergence of three key factors:
1- Weekly Major High.
2- Upper Short-Term Trendline (indicated in red).
3- Upper Long-Term Trendline (indicated in brown).
Following this resistance rejection, the US500 has now moved lower. The initial support level to watch for would be at the intersection of the previous major low at 4400 and the lower red trendline, which functions as a non-horizontal support.
Taking a medium-term perspective, the bears have taken control by breaching below the last significant low marked in gray.
As of now, our expectation is for a bearish continuation towards the daily low at 4400, unless the bulls regain control by surpassing the previous high at 4540.
As is customary, we maintain a close watch on the DXY - USD Index, as the value of nearly everything, including BTC/USD, is linked to the USD, making it the benchmark currency.
The USD index remains bullish, particularly after surpassing the 102.3 resistance level. As of now, we anticipate further bullish momentum towards the 103.2 supply zone, which aligns with the upper black trendline, acting as a non-horizontal resistance.
The view from H4 shows the current overall bullish trend inside the rising wedge in blue. DXY will remain bullish unless the lower trendline and 101.75 are broken downward.
Gold is currently maintaining a strong position near the 1935 support level in orange.
Should this support be breached downwards, we can anticipate further bearish movement towards the 1905 support level. Such a development could have a negative impact on the crypto market.
In the short-term, as mentioned in our last week's article, Gold experienced a rejection at the upper blue trendline, leading to a downward movement.
As long as the support remains intact, we anticipate the bulls to regain control, particularly if the price breaks above the last major high at 1947, marked in green.
In such a scenario, we would expect a movement towards the upper boundary of the blue wedge pattern.
3. USDT.D, Bitcoin and Ethereum analysis
As per usual, both USDT.D and the Fear & Greed Index serve as indicators of trader sentiment. USDT.D reflects whether traders are optimistic (investing in cryptocurrencies) or pessimistic (shifting towards stablecoins).
USDT.D is currently facing resistance around the red last major high.
A break above 7.52% could potentially result in further bullish movement, extending towards the next resistance at approximately 7.85%. Such a scenario may trigger a bearish correction in various crypto assets.
On the other hand, if the last low in orange around 7.38% is broken downwards, we can expect further bearish movement for USDT.D. Such a development would likely have a positive impact on the crypto market.
After experiencing another rejection at the 30,000 level, BTC remains in an overall bearish trend, and we continue to anticipate a downward movement towards the green support and trendline, situated at approximately 27,500. This zone intersects with the lower green trendline, which acts as a non-horizontal support.
Once BTC reaches this point, we will closely monitor the market for potential new short-term trend-following buy setups.
On the H4 timeframe, from a medium-term perspective, BTC continues to be confined within a narrow range.
To firmly establish bearish control, a decisive break below the last low of 28,800 is essential. In such a scenario, we can anticipate a downward movement towards 27,500.
On the contrary, to invalidate the bearish trend and allow the bulls to take control from a short-term perspective, a break above the last high in orange around 29,190 is required.
ETH continues to display an overall bullish trend from a long-term perspective, trading within the confines of a rising broadening wedge pattern marked in red.
Therefore, as we approach the lower boundary of the wedge pattern, we will be on the lookout for trend-following buy setups.
From a short-term perspective, ETH is currently displaying an overall bearish trend, trading within the boundaries of a falling channel denoted in orange.
For the bulls to regain control, a crucial break above the 1863 previous major high, also marked in orange, is necessary.
Meanwhile, ETH would maintain its bearish stance, and we can expect a movement towards the intersection of the red and orange trendlines. At this point, we will be on the lookout for potential buy setups.
4. Quotes / Advices
"Just like Rome wasn't built in a day" success in trading doesn't happen overnight. It requires time, strategy, discipline, and consistent effort until your hard work pays off.
Similarly, "Hiroshima and Nagasaki were destroyed in a day" some inexperienced traders jump in with an all-or-nothing attitude.
Trading is undeniably one of the most challenging professions, and losses are an inevitable part of the journey.
However, choosing to learn from your own mistakes instead of giving up is what truly defines a winning mindset.
5. Closing Remarks
In summary, the cryptocurrency market has experienced a relatively stable trading period over the past week, with Bitcoin (BTC) showing narrow trading within a 1000 range. Some altcoins have taken advantage of this stability to strengthen their positions.
The Fear & Greed Index has remained in the neutral zone for the third consecutive week, indicating a sense of market stability. However, prolonged low volatility periods like this often precede significant price movements, so vigilance is advised.
The US500 (S&P 500) index, representing the stock market's performance, faced strong resistance and has moved lower. The DXY (USD Index) remains bullish, potentially impacting the crypto market, while Gold is maintaining support near 1935.
USDT.D and Fear & Greed Index serve as indicators of trader sentiment. USDT.D is facing resistance, and a break above could lead to further bullish movement, impacting crypto assets. On the other hand, a break below support may have a positive impact on the crypto market.
BTC remains in a bearish trend, with a potential downward movement towards 27,500 unless a break above 29,190 occurs. ETH shows an overall bullish trend from a long-term perspective but is currently within a falling channel in the short-term.
Traders should be watchful for potential shifts in the market and monitor key support and resistance levels to identify potential buying or selling opportunities.