Tuesday Inferno market update
TL;DR — it looks like bulls are getting back in the driving seat.
Last week ended on a knife edge, with buyers coming in repeatedly at the $10,000 mark and holding bitcoin above this key level. A look at the daily chart provides some insights: while bitcoin dipped several times into the $9,xxx area, it always recovered by the close of the candle. And, at the end of the week, the same was true: bitcoin fell as low as $9,755 but closed above $10k.
The major moving averages are informative too. Bitcoin is trading below the 50 MA and above the 100 MA, with the former acting as resistance and the latter as support. Price is being squeezed between these as they converge. The 100 DMA currently stands above $10,000, while the 50 lies around $10,600. Once again, bitcoin has a decision to make and the result of that will likely be a large move. While it could go either way, this corrective phase has lasted for two months now and the consolidation may be almost over. With so much good publicity around, including Bakkt — due in just a few weeks — it seems likely that BTC will break upwards, especially based on comparison with previous corrections in the 2015 bull market. (As a word of caution, we still have not closed the futures gap down in the $8k region.)
A faint hope for alts?
The alts have stayed in the doldrums, with no sign of ‘Alts Season’ yet. There may be hope in the form of a report from Arcane Research, who suggest that — when trading volumes on legitimate exchanges only are taken into account — Bitcoin’s Dominance is closer to 90% than 70%.
‘Adjusting for liquidity by calculating the volume-weighted market capitalization, bitcoin’s market dominance is pushed well above 90%. This is true whether we use the volumes as recorded on CoinMarketCap, excluding stable coins, which are representations of other assets rather than “true” cryptocurrencies, or only look at the 10 exchanges identified by Bitwise as those having “real” (not wash trade) volume.’
The significance of this to alts holders will not be missed. Alts holders have endured months of pain as BTC takes off and leaves them behind. Arcane’s report suggests that, even if Alts Season is not imminent, then at least there may be little room left for the alts to fall.
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