The Crypto Comms #5

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The Crypto Comms Newsletter
The Crypto Comms #5
By Chris on Crypto • Issue #5 • View online
Bitcoin fell to $17,600 over the weekend in what will be remembered as the most remarkable drawdown since the coin’s inception.
These are clearly unprecedented times. Crypto companies are facing insolvency crises and as we all know, there is no safety net in crypto. In such times it’s good to remind ourselves why we’re here in the first place.

In this issue:
  1. Bitcoin daily time-frame analysis
  2. Bitcoin’s intraday situation
  3. Latest happenings
  4. Listening material
Technically speaking
Bitcoin daily time-frame analysis
Bitcoin/dollar bounced 20% off the lows since Saturday - a promising start to what will eventually turn out to be “an obvious” bottoming process in hindsight.
Still, BTC/USD is flat on the week at the time of writing, and has a long way to go to reclaim modestly bullish levels.
Daily exponential moving averages (EMAs) tend to dictate trends in either direction. If price exchanges hands above the moving average, the trend is said to be ‘bullish’ based on a given average. If price trades below the moving average, the trend is said to be ‘bearish’.
Currently, BTC/USD is below the 20, 50 and 200-daily exponential moving averages, indicating a bearish trend or posture on the daily time-frame. In order for the trajectory to change, prices must test, reclaim and eventually back-test these moving averages.
BTC/USD; Daily EMA trends (20, 50, 200)
BTC/USD; Daily EMA trends (20, 50, 200)
When price over-extends in one direction, the probability of a mean reversion increases dramatically. At $20,600, Bitcoin is over-extended to the downside relative to its moving averages. Its price-action is even comparable to the black-swan event of March 2020 when considering these EMAs.
Taking past performance into consideration, one could speculate that the 50-daily EMA is a fairly consequential moving average. Since October 2020, successful retests and bounces/rejections of this EMA offered consequential confluence for Bitcoin’s price trajectory.
Suffice it to say that reclaiming the 50-daily ema would offer robust confluence with a myriad of on-chain data that tell us bitcoin is vastly undervalued.
Bitcoin's intra-day situation
Locally, BTC/USD has reclaimed the hourly trend, and exchanges hands within the pre-breakdown range ($20,100 - $24,200).
BTC/USD intra-day range & levels
BTC/USD intra-day range & levels
Maintaining the intra-day trend reversal above the 50-ema opens the door for a liquidity hunt towards the upper-end of the range. However, an initial rejection off the 200-ema could squeeze prices until one side gives way. Both $18,000 and $24,000 are potential intra-day targets.
But given the larger context of macro undervaluation, hodl portfolios shouldn’t be touched unless it’s to stack more Bitcoin in preparation for the inevitable crack-up boom that will eventually come. As a free-thinking and unapologetic heretic, I believe Litecoin and other coins have a place in crypto portfolios too.
Latest happenings
Listening material
Dear readers,
The purpose of this newsletter analysis is to provide context to current events and cryptocurrency markets. It is released every Monday and Wednesday. I am not perfect and this is not a science - nor is this newsletter a signals service or financial advice. While I cannot promise perfection I do my best to be honest and transparent.
Thank you for reading.
Feel free to contact me with feedback on contact@chrisoncrypto.com.
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