ello ACG warriors, and welcome to a new AltCryptoGems Market Outlook.
In this article, we'll dive deep into recent market developments, from Bitcoin's rollercoaster ride to the Fear & Greed Index's intriguing signals.
We'll also examine the influence of traditional markets on the crypto world, and keep an eye on Gold's glittering potential.
Plus, we'll closely examine the trajectories of Bitcoin and Ethereum, while also offering valuable insights and identifying key levels to watch for potential trading setups.
Table of contents
- Market Heatmap and Fear and Greed Index
- US500, DXY and Gold Analysis
- USDT.D, Bitcoin and Ethereum Analysis
- Quotes / Advice
- Closing Remarks
1. Market Heatmap and Fear and Greed Index
To kickstart my research, I began by analyzing the market heatmap, which provides a quick overview of the entire cryptocurrency landscape.
Unlike the previous week, this week started with bullish momentum after BTC rejected the 25,000 mark. However, over the last couple of days, the market has been relatively uneventful, with BTC trading within a narrow range of 600 points.
The heatmap indicates that the prevailing sentiment remains bearish, although there are a few altcoins showing slight bullish tendencies.
Additionally, it's important to highlight that the Fear & Greed Index has once again indicated "fear" for the fourth consecutive week, causing the monthly sentiment to also turn towards fear.
Historically, when "fear" is signalled for 3-4 consecutive weeks, we can begin to anticipate a potential shift in sentiment from bearish to bullish.
However, it's crucial to emphasize that this shift depends on fundamental factors and BTC breaking above the current local resistance at 26,900. Therefore, it's advisable to exercise caution and avoid making impulsive decisions in the current market conditions.
2. US500, DXY and Gold analysis
We consistently monitor the US500 index to assess the current market sentiment. This is important because the cryptocurrency market often exhibits a strong connection with the stock market, and this relationship can influence its fluctuations.
The US500 index continues to trade within a significant range, with support at 4330.0 and resistance at 4580.0.
Currently, the US500 is positioned in a neutral zone, making it unsuitable for trading. We will patiently await its approach to either the support or resistance levels to identify potential trading opportunities.
On the H4 timeframe, the US500 chart reveals that it remains range-bound, albeit with a prevailing bullish bias.
As things stand, the bulls maintain control, and we anticipate a potential upward movement towards the 4570.0 gap.
However, it's crucial to keep an eye on the recent low marked in red at 4429.0. If this level is breached to the downside, it could signal a shift in momentum, with the bears taking over and the potential for a descent towards the 4330.0 support level.
As a standard practice, we maintain a close watch on the DXY - USD Index. This is imperative because the value of almost everything, including BTC/USD, is intricately linked to the USD, rendering it the benchmark currency in the financial markets.
The USD index is currently displaying resilience, but it is worth noting that it is trading within the 105.0 - 105.7 resistance range. This situation raises the possibility of a reversal, although confirmation would be contingent on the detection of a bearish reversal setup on lower timeframes.
The bullish momentum is expected to endure as long as the recent low, indicated in blue at 104.85, remains unbroken.
However, it's essential to monitor this level closely, as a breach to the downside could signify a shift in sentiment from bullish to bearish, potentially triggering a move towards the support zone located around 103.63.
Conversely, if the recent low continues to hold, the bulls will maintain control, and there remains the possibility of further upside movement in the DXY.
Shifting our focus to Gold, in alignment with our discussion from the previous week, Gold experienced a rejection of the 1905.0 support and has since traded higher.
Nevertheless, it is currently approaching a resistance zone marked in orange. In order for the bullish momentum to persist, a breakthrough above the 1948.0 level is necessary.
Here's the perspective from the H4 timeframe, indicating that the bulls have taken short-term control following a breakthrough above the last high and the upper red trendline.
The bias continues to favor the bullish side, and we anticipate further upward movement until reaching the orange resistance zone, at which point we will be on the lookout for potential sell setups.
3. USDT.D, Bitcoin and Ethereum analysis
As usual, I always start my analysis with USDT.D as it serves as an indicator of traders' sentiment. USDT.D reflects whether traders are optimistic (investing in cryptocurrencies) or pessimistic (shifting towards stablecoins).
USDT.D has experienced a relatively uneventful week, maintaining a steady position within our established support zone of 7.94% - 8.1%. As a result, we continue to anticipate the potential for bullish activity, which may not bode well for the broader crypto market.
However, for the bears to regain control, it would necessitate a breach below the support level at 7.94% along with the lower red trendline. Such a development could be favorable for the cryptocurrency market.
Upon closer examination of the H1 timeframe, it becomes apparent that USDT.D is maintaining a bearish trend, marked by lower lows and lower highs.
In order to tilt the balance back in favor of the bulls and indicate a potential shift from a bearish to a bullish perspective, we would need to see an H4 candle close above the previous significant high, which is situated at approximately 8.14%.
BTC experienced a rejection of the 25,000 support and subsequently moved higher. However, it appears that the bullish momentum was not sufficient to reach the resistance zone, at least not within this week.
Currently, BTC finds itself in a neutral position, situated between the 24,200 support and the 28,000 resistance, indicating a lack of strong directional movement.
When analyzing the H4 timeframe, it becomes evident that the bulls are currently holding short-term control, and we anticipate this momentum to persist until reaching the 27,350 supply zone highlighted in red.
The bullish scenario is expected to remain intact unless the last minor low at 26,200 is breached to the downside. In such a scenario, we would anticipate a resurgence of bearish sentiment, potentially leading to a retest of the 25,000 support level.
Similar to BTC, ETH experienced a decline at the start of the week, leading to a rejection near the lower orange trendline within the orange channel.
Currently, ETH is hovering around the green resistance zone. In this situation, there is an anticipation of bearish pressure, particularly if the most recent low is breached to the downside. This scenario could signal a shift in sentiment and potentially lead to further downward movement.
Taking a medium-term perspective on the H4 timeframe, it is essential for the bulls to achieve a breakthrough above the most recent minor high at 1670.0 to reinforce their control.
In the event of a successful breakout, we can reasonably anticipate a bullish move towards 1740.0. Furthermore, if the price manages to surpass 1740.0, we should prepare for the possibility of a more substantial advance towards 1815.0.
However, it's important to note that the overall bias remains bearish, and there is still the potential for ETH to continue trading lower.
4. Quotes / Advice
Do you always fasten your seatbelt when driving?
Not wearing one implies a belief that accidents won't happen to you. However, we know that a single accident, especially without a seatbelt, can be life-altering.
In trading, we consider ourselves Risk Managers, not just Traders. Our primary control lies in managing risk, as market outcomes are unpredictable. Professional traders prioritize risk over reward. No matter how sound your trading strategy, poor risk management can lead to failure in trading.
Trading without a stop loss is like driving without a seatbelt – one trade can wipe out your account.
5. Closing Remarks
In summary, the cryptocurrency market has shown signs of bullish momentum, with Bitcoin (BTC) rejecting the $25,000 level and trading within a narrow range.
However, the market's prevailing sentiment remains bearish, as indicated by the Fear & Greed Index, which has signalled "fear" for four consecutive weeks.
A shift to bullish sentiment depends on fundamental factors and BTC breaking above local resistance at $26,900.
The US500 stock index is in a neutral zone, with support at 4,330 and resistance at 4,580.
The DXY (USD Index) is trading within a resistance range, potentially indicating a reversal. Gold is approaching a resistance zone at $1,948, and its bullish momentum depends on breaking through this level.
USDT.D, an indicator of trader sentiment, is steady within a support zone, which may not favor the broader crypto market.
BTC is neutral between $24,200 support and $28,000 resistance, with short-term bullish momentum.
Ethereum (ETH) faces resistance around the green zone and has a bearish bias, although a breakout above $1,670 could lead to further gains.
In brief, the cryptocurrency market is showing signs of potential bullish sentiment, but caution is advised, as this shift depends on BTC's performance and fundamental factors.