This week: In this week’s newsletter we discuss Bitcoin/Dollar’s close at monthly support. We also discuss Ethereum/Dollar’s close at monthly support. For altcoins, we revisit a lacklustre Dogecoin. We conclude with Commentary Corner, where we assess the apparent breakdown in equities. https://coinmarketcap.com/coins/views/all/ Table of Contents 1. Bitcoin Holds Monthly Support 2. Ethereum Big Box Make Boing (Maybe) 3. No Musk Effect for Dogecoin Holders 4. Commentary Corner: Equities Indexes Break Down Dear reader, Thank you for subscribing to TechnicalRoundup. We are grateful for your readership and hope that you stay with us for many future issues. The premise behind this newsletter is simple: you get all your high time frame charts for the most important digital assets in one place. Same place, same time, every week. Whether you are a short-term trader looking for a bias heading into the week, or a cautious investor trying to get a sense for this new asset class, we are confident that there is something you will find valuable in the coming pages. We are not a signals service. That much is obvious. What we can offer you, however, is something better: a logical framework, a consistent method, and robust analysis. Every week. We are not perfect. We will get things wrong. When we do, you will know because we will discuss them thoroughly. If the markets are unclear or uninteresting, we will not force out analysis that we do not believe to be compelling. Whilst we can not promise perfection, we will do our utmost to be honest and transparent. Enough text, you must want to see some charts at this point! We hope you enjoy TechnicalRoundup. If for any reason you do not, or have feedback for us of any kind, it will be graciously received via email at letters@technicalroundup.com. 1. Bitcoin Holds Monthly Support https://www.tradingview.com/x/iaX9Cvmj/ https://www.tradingview.com/x/2OmYHSXB/ Bitcoin/Dollar closed above monthly support at $35000-$37000. As before, we remain broadly optimistic (even if just for counter-trend bounces) as long as that range low holds. The bounces have been shit, volatility has been low, correlations with legacy are intact, and macro still sucks. But support is support. It would be unreasonable for us to argue (as we did months ago) that a range from $30000 to $60000 is expected, only to turn bearish at support. With the passage of time, the ‘$30000 is the new $6000’ argument gains traction. Notwithstanding, there are usually no prizes for selling support, and if $30000 indeed breaks down, there will likely be enough time to meaningfully shift bias. On average, at least with our higher time frame newsletter system, being slightly late to flip bearish below support is still better than shorting support. Even for conservative traders understandably reluctant to position at these beaten up levels, articulating a short idea at the range low is not something in our toolkit. On lower time frames, shorter-term optimism is contingent on the local lows holding. Specifically, the market is in this clunky higher low area around $38500 on the weekly time frame. It’s a decent line in the sand for intraweek directional bias i.e. if there’s going to be a bounce, it’s likely to originate from that area. If it rolls over, we expect discounts deeper in monthly support. Resistance is unchanged and still clustered in the mid-$40000s, for a start. To summarise, very ‘meh’ market, but one where monthly support is still intact. 2. Ethereum Big Box Make Boing (Maybe) https://www.tradingview.com/x/GmZPtRhY/ https://www.tradingview.com/x/VlFMjjpZ/ Ethereum/Dollar is also holding its monthly range low. The structure is slightly less clear than Bitcoin/Dollar, but the market is still holding support at $2200-$2800. A generously wide zone indeed, more useful to higher time frame allocators than intraday wizards seeking precision. Same considerations outlined in Bitcoin/Dollar apply here i.e. as long as the range low holds it’s too early to be a doomer, broadly speaking. Below it, assuming the breakdown sticks, the market is shit and you get to scoop the world supercomputer token at much cheaper prices. The weekly time frame is still between key pivots. $3000-$3300 is still resistance. Untested support is the range low closer to $2000. $2500 is a similarly clunky ‘if we scam pump, it has got to be from here’ type of level for shorter-term market views. Eyeballing the charts, Bitcoin/Dollar is technically clearer. Its monthly time frame levels are unchopped and it’s closer to weekly support than Ethereum/Dollar. Something to bear in mind (or bull in mind, whatever). Given the nasty failed breakout above $3000, acceptance through that area would be the first decent signal to follow the higher time frame strength. Double fakeouts are rare. To summarise, similarly ‘meh’, but monthly support is still intact albeit with a less compelling weekly chart at the time of writing. Bitcoin/Dollar ideas are somewhat clearer. 3. No Musk Effect for Dogecoin Holders https://www.tradingview.com/x/ZvJYQeog/ Dogecoin has been boring. On its own that statement wouldn’t be meaningful, but given its highest profile advocate (Elon Musk) purchased Twitter, some market participants were expecting more. He alluded to maybe using Dogecoin for payments or verification on Twitter, but outside of a short-term acquisition pump, the market has retraced and rallies continue to be sold. This is telling for the altcoin market as a whole. Under different conditions, the acquisition news alone would be enough to ignite a bull market. As a reminder, the market literally pumped for weeks and months on end from benign tweets alone and even flipped Bitcoin and Ethereum volumes at its apex. Yes, the market cap was much lower and the ‘Elon effect’ (like any other recurring price sensitive event) was expected to become less meaningful with each repeated bout, but a full retrace is still shitty. Perhaps that will change if the token gets a deeper Twitter integration. Meanwhile, altcoins have continued to be flat. We get a couple of rogue, eventspecific pumps or momentum plays (Ape Coin and STEPN come to mind) but there’s no passive market beta altcoin bid to write home about. If you can ride and trade the asynchronous outliers, more power to you. For now, the market remains seemingly focused on equities indexes and their impact on the majors (Bitcoin and Ethereum). 4. Commentary Corner: Equities Indexes Break Down https://www.tradingview.com/x/c1O55ORU/ https://www.tradingview.com/x/7fAHkin7/ The correlation trade is still active. Namely, when U.S. risk indexes (S&P 500, NASDAQ 100) dump, crypto follows. When they pump, crypto follows. Divergences have been short-lived and the decoupling trade has continued to be a pain point for eager traders. As Cred argued in his recent video, given this strong and now lengthy correlation, we must be more robust in articulating what it would mean to decouple. Specifically, a decoupling must either last longer (more than a trading session or even a day) or be larger in magnitude (bigger % moves) in order to be meaningful. Ideally both! As mentioned, divergences between crypto and risk have been short-lived, and it hasn’t been worth chasing every small sign of relative strength or decoupling. On that note, a higher time frame decoupling may be emerging. Somewhat. Tentatively. Can you tell we’re being conservative? This is evidenced by a monthly breakdown in indexes while the majors have thus far held monthly support. The S&P 500 closed below its monthly range low at $4310-$4370. The NASDAQ 100 also closed outside of its range. Support is significantly lower in both cases. Someone is probably bluffing. If the equities breakdown sticks and accelerates towards support, crypto very likely gets dragged lower as well. If the equities breakdown reclaims, we expect crypto to moon. One less likely scenario, but one worth contemplating, involves equities continuing to move lower while crypto holds its floor. This is the most optimistic case and the one we assign the lowest likelihood to, but still worth thinking about given the divergence in monthly charts. Perhaps the clearest and most conservative inference would be to more confidently risk on crypto if equities form a failed breakdown. That makes sense to us. Otherwise, unless these charts are fixed, being long crypto in the face of (increasingly) weak equities makes for a tricky trade for our conservative boomer newsletter.
