Cryptic ball: because the ConstitutionDAO won't save us.
Things are looking scary today, but this is still the 15% pullback we were talking about yesterday. Bitcoin has tested $56.9k, slightly below October 28th's flash dip, which is also where that red line I've drawn back in early August is located. Check the chart below to see why that's a critical level. And, even if the orange coin falls further, it still has two levels of support it can hold on to without damaging this bullish market structure, i.e. without failing to print a higher low.
The first is $53k, where the 100-day moving average is lying (and also the key 20-week exponential moving average). And the second, more dangerous scenario, would be $46k, where the 200-day MA currently sits - which would also amount to the normal 30% pullback that we've always seen in healthy bull markets. But that would raise fear levels to a chaotic point - especially as many alts will fall below key levels that have been supporting their uptrends. Meanwhile, what to do?
Wednesday I wrote that if BTC fell below $58k (note $57k is a more accurate level) again we could be experiencing a dead cat bounce. If we close the day below that level then I'm expecting we'll keep drifting lower during the weekend until we meet one of the two levels explained above. Conversely, if the bounce we're seeing right now continues and we close the day (UTC) higher, then the range we've been in since October 15th - also explained in today's chart art - is acting like it should, meaning the dip is likely over. Overall, this is all about handling that short-term pain (or even trading it) as the macro picture continues to look very good!
Chart art: will you buy the dip?
Three things: old MacDonald had a farm.
- Eric Lam shows "bitcoin’s correlation with tech stocks disappeared".
- Gerald Votta tries to show he "knows who Satoshi Nakamoto is".
- Elliptic's excellent report on"DeFi: Risk, Regulation, and the Rise of DeCrime" is a good kind of show-off.