The market’s mistrust of altcoins is at its highest level in a long time. The hot topic in the space is how much lower the market can go. Sheldon discusses the current state of the market (and how to best navigate this emotionally difficult crypto sell-off) with Ran.
- Bitcoin: Market outlook, leverage shake out, dominance, and price prediction
- Buying opportunities
Bitcoin: Market outlook, leverage shake out, dominance, and price prediction
The stock market has taken a slight step back after a quick rebound, but it is still looking positive and should continue to rise.
Technicals show that leverage derivatives typically fall harder than Bitcoin price when there is a drop. Furthermore, it takes a long time for leverage to return to its previous level.
Bitcoin has dropped to retest the 200-day moving average, with $46k being the key level to close above. Bitcoin is expected to range between $52k and $46k before retesting the downward trend line, which could take up to a week.
There is a shake-out every time Bitcoin approaches the lows again, as whales accumulate. It is not advisable to trade these levels; instead, dollar costing is ideal.
Despite the price drop, Bitcoin broke a downward dominance pattern, which caused altcoins to experience even more severe pullbacks. Whales accumulating could not fill their orders on the latest wick down around $42k because of how quickly the prices fell. They have another chance if prices continue to fall following the strong bounce.
Bitcoin may experience greater losses in the coming days as it approaches the bearish trend line. However, we are seeing lower lows, and every dip provides buyers with more possibilities.
Fantom (FTM) and Kusama (KSM) are returning to the purchasing zone every three days; for long-term play, dollar costing is recommended. The Graph (GRT) is back in the purchasing zone as well; the last time it came back down to these levels, it had a 150% rally. Chainlink (LINK) also presents buying opportunities at every dip.
DeFi coins have retraced back to the support zone, according to the DeFi index. The relative strength index (RSI) has reset, there is a significant bullish divergence, and there are excellent buying opportunities.
The big concern in the market is whether the bull cycle is still alive and kicking, and how much lower prices can go. There has been no discernible divergence in pricing or on-chain data to indicate that the bull cycle has come to an end; now is the time to be patient and emotionally stable.
There may be some bumps on the road, as well as new drawdowns, but they all create purchasing opportunities.