Getting stuck on the title
Cryptic ball: getting stuck on this concerted FUD.
The weekend ahead may not be that volatile as long as all of us, cryptoasset traders, remember that this May's China FUD was best synthesised by the title of this article at The Block: "Three self-regulatory organisations reiterate China’s 2017 stance on crypto amid market volatility". Naturally, we understand it's great to short FUD before everyone else. But, greed apart, what else can come up to push markets even lower? Well, to begin, total market cap is down 8.5% since yesterday. Are there any reasons to be hopeful?
That uptrend we talked about isn't invalidated yet, but BTC isn't currently showing much strength around the important $35k support zone where it is standing. If it fails that, bears will likely try to test $31k for the third time, which could finally break. So, even though the current dull market doesn't warrant a short, as the old adage says, be aware that if $30k doesn't hold we could see $20k next (but this is only likely if leveraged traders have their liquidation levels below, which isn't the case for now). Conversely, bulls want to see a weekly close above $40k to recover confidence! For us, both scenarios are unpredictable, meaning sideways is good.
Chart art: getting stuck on meme averages.
Market musings: getting stuck on past performance.
And sideways is good, at least in the short-term, for two reasons. Firstly, as highlighted in Nunya Bizniz's reminder above, we can find a convincing source of hope in the way the 2013 bubble played out. That's because the 20-week MA is widely considered as a major support and resistance level in long-term trading. And, in June 2013, bitcoin stayed well below it for a full week, and only recovered that level after a month of scary, sideways action.
It's not that former glory indicates future results, but as humans are biased towards historical data, then many traders may feel despair if we fail to see a serious bounce in the next month. But before we can bounce, note such despair will be compounded if we get another leg down. While some are claiming the billionaires announcing entries into this market don't care about corrections, maybe they are announcing entries because they have already entered and want to get out. Farfetched, right. But just keep that in mind instead of being mindlessly bearish or bullish. Instead, just trade the below range, which is the second reason why sideways is good for now. Or, even better, just enjoy the weekend and hope May isn't the month crypto got stuck in a bear market!
Visual block: getting stuck on this trading range.
Three things: getting stuck on money printing.
- Do you miss Non-Fungible Tokens news? Well, this is better than that: Maria Shen compiled five predictions regarding the next use cases for NFTs.
- Do you miss on-chain data? Well, this is better than that: Glassnode compiled great insights on this May's crash that will help you identify future ones.
- Do you miss Arthur Hayes' crypto trader digest? Well, this is better than that: he offers a global macro thesis that's very bullish for Bitcoin and DeFi.