BTC Market Update

Bitcoin has fared remarkably well in the face of macro headwinds and geopolitical uncertainty. Nonetheless, the correlation to legacy markets remains tight, and therefore price action is less technical than can usually be expected. Boomer warmongering notwithstanding, Bulls have dragged the market kicking and screaming over the 12H cloud, where it could be setting up for a move up to range high.

Weekly

On the weekly chart, price continues to respect the parallel channels it’s been ranging within for the past one and a half years. One notable change in behaviour, is that the no-mans land region between the two channels is no longer behaving as an air-pocket, which ‘sucks’ the price to the other channel boundary. Therefore, we can begin to regard these as triple stacked channels. Ah, the joy - trading this is going to be as much fun as watching a primary school musical, in 12 acts.

Looking at the market from a range trading perspective, we can see a clear reversal pattern, confirmed by a Stochastic crossover from below 20. This has set us up for a move towards the W20MA at 50.6K. This level is one of the first Bosses that valiant bulls must overcome in order to march towards the fame and glory of new ATHs.

Looking at the weekly cloud, we can see that following a close above the cloud, price was brutally rejected off the weekly Kijun, however, just as in a coming of age high school movie, our BFF, the cloud came to the rescue as support. Provided that the price doesn’t close within the cloud, we remain HTF bullish.

Cautionary factors are the lagging span threatening to cross under price, and the Kijun curling up towards the Tenkan. Bulls are going to need to get their act together, and fast if they’re going to prevent the cloud turning bearish.

Daily

The daily cloud is lining up for what could be a textbook Edge to Edge setup. Bullish confirmation is the Lagging Span crossover, together with a successful Kijun retest, and, whilst ideally you enter an E2E with a bullish TK cross, I’ll definitely trade this should we get a close inside the cloud.

The TP for this setup is that gloriously flat Span B, whilst a close outside the cloud would invalidate the setup.

At the expense of sounding like a broken record, reclaiming Cloud Span B at just under 51K is the Final Boss in the Bull’s Moon Mission, and provided we trade below it, nothing is locked in.

12H

On the 12H, we can see an inverted head & shoulders forming with a 60K measured move target. Whilst I’m not discounting the fact that BTC will revisit 60K at some point, the probability of us going to 60K in a straight line is <10%.

The 12H cloud was the scene for the Bull’s first victory, and whilst this was more of a skirmish than a battle, it is the first confirmation that the recent rally has legs, and is not simply a correction.

On this timeframe, we can see that the cloud is in an almost full bulltard configuration, with Price, Tenkan and Kijun fanned out bullishly, Lagging Span above price, and price above cloud. Should we get continuation, I would expect a Kumo twist within the next week.

In the interim, I’d consider a test of Span B healthy, as well as a decent entry point, with invalidation being a close within the cloud.

Considerations

Funding rates remain negative to flat…

…Whilst estimated leverage is heading back up to ATH. At some point this pressure is going to need to be let out of the system. This could happen in either a controlled manner, or in an explosive one, with the right catalyst.

Exchange reserves have hit new lows.

In conclusion, the TCP trend reversal cloud (not shown on the chart as it’s still top secret) remains confirmed bullish.

Caveat

Needless to say, the above analysis goes down the drain, should bombs start falling on Ukraine, the US sabre rattles with greater intensity, etc.

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Trade safe & have a great weekend,

TCP

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