So... Was this it?
Last week I wondered whether or not BTC was rangebound. I postulated that it was likely we could see a correction to the downside, possibly targeting the CME gap. Let's have a look at what happened.
As you can see, price returned to the range. Most indicators turned south and since volume has been dropping ever since the sell off in early March, things aren't looking very rosy. Does that mean there is no upside at all? No glimmer of hopium? Are we, in fact, all going to die?
Well, if you ask me, it is most likely that we correct to at least the level of the CME gap and quite possibly to the bottom of that range. A lot depends, as I have been saying, on the DXY. I see at least some hope there. Even though most other analysts argue that the DXY has bottomed, I am less sure. Even though it does look more promising for the USD, I still think it is in a downward trend that has yet to be broken.
Both the DXY as BTC are testing resistance. If the DXY breaks out of that channel, most likely BTC will be rejected by that long term support/resistance line at 10.5. If the DXY continues its downtrend to below the recent low, we might be in for a surprise. And that surprise would echo through all markets, not just crypto.
Do I think that is the most likely scenario? Well, no. I think I made that clear over the past few months. However, it is not totally unrealistic that the USD will suffer inflation instead of deflation. And if the USD becomes cheaper, everything priced in USD will become more expensive. Stocks, metals, commodities and, yes, crypto.
Last but not least: be very careful with DeFi. We all make our own assessments and you will get no trading advice from me, just that I would be careful putting a lot of money into that market.
As always: trade safe and be careful over this weekend. If you want, you can follow me on Twitter: @htltimor
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