Bitcoin: Bull Market Support Band

Summary

The video script provides an update on Bitcoin's current market situation, focusing on its struggle to maintain a position within the bull market support band, which ranges from $61k to $63.5k. It discusses the significance of the 20-week SMA and 21-week EMA and compares the current market trends with historical patterns, particularly drawing parallels with the market behavior in 2019 and 2023. The script also touches on the impact of the Federal Reserve's monetary policy on Bitcoin's performance and the potential implications for the altcoin market.

Takeaways

• 📉 The 20-week SMA for Bitcoin has decreased to around $63,500, and the 21-week EMA is at approximately $61,000, indicating the current bull market support band range.
• 🔄 Bitcoin has been struggling to sustainably break back into the bull market support band, particularly above the 21-week EMA, which is a concern for its momentum.
• ⏳ Historical comparison shows Bitcoin experienced a similar drop below the 20-week SMA and 21-week EMA in August 2023, failing to recover until October.
• 📊 The video discusses the tendency for Bitcoin to perform poorly in August and September historically, with most of these months being red in terms of monthly returns.
• 💔 The 'death cross' phenomenon, where the 50-day SMA falls below the 200-day SMA, occurred in 2023 and was followed by a rally and subsequent rejections at the 50-day and 200-day SMAs.
• 📈 The comparison to 2019 is highlighted due to the Federal Reserve's interest rate cuts and gold's breakout from its range highs, which influenced Bitcoin's performance.
• 🔄 The video suggests that Bitcoin's current pattern of lower highs and lows resembles the 2019 market structure, before the Federal Reserve initiated quantitative easing.
• 🤔 The presenter speculates that a shift in monetary policy, such as a pivot from quantitative tightening to easing, may be necessary for a significant market change.
• 📊 The altcoin market is noted to have weaker performance compared to Bitcoin, with altcoins losing the bull market support band before Bitcoin and experiencing more pronounced lower highs and lows.
• 📉 Social interest in cryptocurrency is reportedly low, with many people tuning out due to poor altcoin performance, which is often tied to their pursuit of quick riches.
• 🔮 The presenter anticipates continued negative seasonality for a while, suggesting a cautious outlook and the need to monitor key support levels and moving averages closely.

Q & A

What is the current status of the 20-week SMA for Bitcoin?

The 20-week SMA for Bitcoin has been decreasing and is now around $63,500.

What is the 21-week EMA for Bitcoin and its significance?

The 21-week EMA for Bitcoin is around $61,000, and it's significant because it's part of the bull market support band range, which is a key indicator for market trends.

Why has Bitcoin been unable to sustainably get back into the bull market support band?

Bitcoin has been unable to sustainably get back into the bull market support band due to its inability to stay above the 21-week EMA and the challenges it faces in the market dynamics.

What does the comparison between the current situation and August 2023 indicate about Bitcoin's performance?

The comparison indicates that Bitcoin fell below the 20-week SMA and the 21-week EMA in mid-August 2023, and it took until October for it to get back above its 20-week SMA, suggesting a potential similarity in market behavior.

How does the performance of Bitcoin in August and September typically compare to other months?

Historically, August and September tend to be the worst months for Bitcoin in terms of monthly returns, with most of them being negative, similar to how most of February and October are typically positive.

What is the 'death cross' in the context of Bitcoin's price movement?

The 'death cross' refers to a situation where a short-term moving average, such as the 50-day SMA, falls below a long-term moving average, like the 200-day SMA, which is often seen as a bearish signal.

What was the outcome of the 'death cross' for Bitcoin in 2023?

After the 'death cross' in 2023, Bitcoin rallied into the 50-day SMA, experienced a pullback, and then pushed through to the 200-day SMA, reaching new cycle highs, indicating a strong market reaction post 'death cross'.

Why is the comparison to 2019 significant for understanding Bitcoin's current market situation?

The comparison to 2019 is significant because it was a year when the Federal Reserve cut interest rates, and gold broke out of its range highs, which influenced Bitcoin's performance with lower highs and lower lows until the rate cuts and QE began.

What is the current issue with Bitcoin's dominance and its relation to the altcoin market?

The issue is that until Bitcoin dominance reaches around 60%, Bitcoin is theoretically stuck in a wedge pattern, absorbing liquidity from the altcoin market, which affects the overall market movement and interest.

What are the key resistance levels for Bitcoin in relation to its bull market support band?

The key resistance levels for Bitcoin are around $61,500 to $63,000, which correspond to the 50-day SMA and the 200-day SMA, providing significant resistance for Bitcoin's price movement.

Outlines

00:00

📈 Bitcoin's Bull Market Support Band Update

This paragraph discusses the current state of Bitcoin's bull market support band, highlighting the 20-week SMA at around $63,500 and the 21-week EMA at approximately $61,000. The speaker notes Bitcoin's struggle to maintain its position above the 21-week EMA and compares the current situation to a similar period in 2023. Historical patterns are examined, particularly the tendency for Bitcoin to underperform in August and September, with an average performance chart provided for context. The comparison to 2023 includes a 'death cross' event, where the 50-day SMA fell below the 200-day SMA, and the subsequent market reactions are analyzed.

05:01

📊 Analyzing Bitcoin's Performance Post-Death Cross

The speaker delves into Bitcoin's performance following the 'death cross' in 2023, detailing the initial sell-off, the rally to the 50-day SMA, and subsequent rejections around the 200-day SMA. The comparison to 2019 is made, drawing parallels to the Federal Reserve's interest rate cuts and gold's breakout from its range highs. The paragraph examines the differences in market reactions between 2023 and 2019, noting the nuances in Bitcoin's price movements and the implications for the current market situation.

10:01

🤔 The Impact of Economic Factors on Bitcoin's Trajectory

This section explores the potential influences of economic factors on Bitcoin's price, such as labor market weakness and inflation concerns. The speaker revisits the comparison to 2019, suggesting that Bitcoin's current challenges in surpassing the 50-day SMA may be indicative of broader economic uncertainties. The discussion also touches on the relationship between Bitcoin dominance and the altcoin market, suggesting that Bitcoin's absorption of altcoin liquidity could be a factor in the current market dynamics.

15:03

📉 Altcoin Market's Struggles and Bitcoin's Dominance

The final paragraph focuses on the altcoin market's performance relative to Bitcoin's, noting the altcoin market's failure to maintain its position above the bull market support band. The speaker discusses the implications of Bitcoin's dominance and the potential for a shift in market sentiment once Bitcoin's dominance reaches around 60%. The paragraph also considers the broader cryptocurrency market's current state, suggesting that a change in monetary policy, such as a pivot from quantitative tightening to easing, may be necessary to stimulate market growth.

Keywords

💡Bitcoin

Bitcoin is a decentralized digital currency that operates without a central bank or single administrator. It is the first and most well-known cryptocurrency. In the video, Bitcoin is the primary subject of discussion, with its price movements and market trends being analyzed in the context of the broader cryptocurrency market.

💡Bull Market Support Band

The bull market support band refers to a range of prices that, if maintained, indicates a market is in a bullish (rising) trend. In the video, the script discusses how Bitcoin's price has been fluctuating around this support band, which is a critical level for market participants to watch as it can signal the continuation or reversal of a trend.

💡20-week SMA (Simple Moving Average)

The 20-week SMA is a technical indicator that smooths out price data based on the past 20 weeks of a security's closing prices. It is used to identify trends and is mentioned in the script as a key level that Bitcoin's price has been interacting with, indicating its importance in gauging market sentiment.

💡21-week EMA (Exponential Moving Average)

The 21-week EMA is another technical indicator that gives more weight to recent prices, making it more responsive to new information than a simple moving average. The script discusses the 21-week EMA as part of the bull market support band and as a level that Bitcoin has struggled to maintain above.

💡Death Cross

A death cross occurs when a short-term moving average, such as the 50-day SMA, crosses below a long-term moving average, like the 200-day SMA. It is often seen as a bearish signal. The video script refers to a death cross event in 2023 and its impact on Bitcoin's price action.

💡Seasonality

Seasonality in financial markets refers to patterns that recur at specific times of the year. The script mentions that August and September tend to be the worst months for Bitcoin's performance based on historical data, suggesting that current market conditions may be influenced by this seasonal trend.

💡Quantitative Tightening (QT)

Quantitative tightening is the process by which a central bank reduces the supply of money by selling government securities or other financial assets it holds. The script implies that the current monetary policy, including QT, may be affecting Bitcoin and the broader market's liquidity and performance.

💡Quantitative Easing (QE)

Quantitative easing is a monetary policy in which a central bank purchases government securities or other securities from the market to inject money into the economy. The video suggests that a shift from QT to QE could potentially impact Bitcoin's price positively.

💡Altcoin

Altcoins are cryptocurrencies other than Bitcoin. They represent the majority of the cryptocurrency market by number of coins but have different market dynamics. The script discusses altcoins in the context of their market performance relative to Bitcoin and how they are affected by the broader economic conditions.

💡Dominance

In the context of the cryptocurrency market, dominance refers to the percentage of the total market capitalization that Bitcoin holds. The script mentions that until Bitcoin's dominance reaches a certain level, it suggests that Bitcoin is absorbing liquidity from the altcoin market, affecting the overall market dynamics.

💡Social Interest

Social interest in financial markets refers to the level of public attention and engagement with a particular asset or sector. The video script notes that low social interest, particularly in altcoins, could be a factor in the current market conditions, as it reflects a lack of enthusiasm or participation from the public.

Highlights

Update on Bitcoin's 20-week SMA and 21-week EMA, indicating the bull market support band range is from around 61k to 63.5k.

Bitcoin has been unable to durably get back into the bull market support band, facing challenges staying above the 21-week EMA.

Comparison of current Bitcoin situation with the scenario in August 2023, noting a similar drop below the 20-week SMA and 21-week EMA.

Historical analysis showing Bitcoin's performance in August and September tends to be the worst, based on monthly returns.

Observation of a 'death cross' in 2023 where the 50-day SMA fell below the 200-day SMA, impacting Bitcoin's trajectory.

Discussion on the potential reasons for Bitcoin's current state, including labor market weakness and inflation concerns.

Comparison of 2019 and 2023 market conditions, highlighting the Federal Reserve's actions and their impact on Bitcoin.

Analysis of Bitcoin dominance and its relation to the altcoin market, suggesting a potential wedge formation.

Insight into the altcoin market's performance relative to Bitcoin, indicating a lower high and rejection at the 20-week SMA.

The importance of Bitcoin's price stability compared to the altcoin market's lower lows and highs.

Assessment of the current market sentiment, suggesting a lack of social interest due to altcoin underperformance.

Discussion on the potential for a shift in monetary policy to affect Bitcoin and altcoin market dynamics.

Prediction of continued negative seasonality for Bitcoin, with a focus on the importance of the 50-day and 200-day SMAs.

Strategic outlook on the cryptocurrency market, emphasizing the need for a Fed pivot from QT to QE for potential market recovery.

Final thoughts on the market, reiterating the importance of watching the bull market support band and death cross indicators.

Transcripts

hey everyone and thanks for jumping back

into the cryptoverse today we're going

to talk about Bitcoin and we're going to

be providing an update to the bull

market support band if you guys like the

content make sure you subscribe to the

channel give the video a thumbs up and

check out the sale on into the

cryptoverse premium at intothe

cryptoverse decom let's go ahead and

jump in so it's been a couple of weeks

since we did this video so let's just go

ahead and provide an update on it the

20we SMA for Bitcoin continues to come

down

it's now around

63,5 68 and the 21 we EMA is at around

61,000 and $25 so more or less the bull

market support band range is from around

61k to 63 A5 now one of the issues that

Bitcoin is facing right now is the fact

that the last couple of weeks it's

actually been unable to really durably

get back into the bull Market support

band right it's been unable to stay get

into and stay above the 21 we EMA now

remember it's a band right it it it

consists of two moving average the 20we

SMA simple moving average and 21 we EMA

exponential moving average and of course

the exponential moving average is

quicker to react to price movements than

the 20we

SMA

um but you know I think the issue for

Bitcoin and it and it just continues to

be this is that it hasn't it hasn't

really been able to get back to its 20we

moving average since you know since it

had this pretty big drop back in Late

July and you could argue that it is

somewhat similar to what we experienced

last year uh if you were to look at

Bitcoin back in August of 2023 you can

see that around mid August or so Bitcoin

fell below the 20we SMA and the 21 we

EMA it failed to get back above its 20we

SMA until October right until October

now we just put out a video yesterday

talking about how August and September

does in fact tend to be the worst time

of the year for Bitcoin when you look at

monthly returns right and just pulling

that chart up once again to just you

know in case you missed the video it

wasn't really that riveting so I don't

blame you but on average right Bitcoin

doesn't do that well in August at such

September that doesn't mean that you

can't occasionally have a green August

or a green September it just means that

most of them are red just like you know

most of the time February is green and

most of the time October is green that

doesn't mean every February and every

October is green

okay so I mean you know the last time we

had a red October was back in 2018 last

time we had a ride February was in 2020

right as we were going into the pandemic

crash so in that regard right in that

regard it certainly you know it

certainly seems reasonable to compare to

you know what was going on last year

Bitcoin fell below the 20 week SM about

mid a or mid August and really it took a

number of weeks for Bitcoin to to muster

up the strength to get back above it but

what I'd like to do though is is look on

some of those shorter time frames okay

because there are some things that are

playing out SL slightly

differently one of

those is the you know we also we also

saw Bitcoin get this for lack of a

better term death cross back in

2023 where the 50-day SMA fell below the

200 day SMA and you can see that it

happened right there in September of

2023 and essentially what Bitcoin did

back then was after after the death

cross

Bitcoin rallied into the 50-day

ese it then got a pullback for about a

week and then it got through the 50-day

and went to the 200 day got rejected

from there for a couple of you know for

a week or so back to the 50-day and then

up to New To newy You know to new cycle

highs so that's how it played out back

then how is it playing out today now

remember back then it was a rally after

the death cross right in fact Bitcoin

sold off into the death cross and then

right after it Bitcoin went up we

actually talked a lot about that you

know I said that the most likely outcome

back then was that it sells off just

before it and then rallies in you know

right after it and that actually did

occur I

underestimated just how far it would

rally right I I didn't really think

Bitcoin would get that far above 35 K

back in 2023 so it certainly exceeded my

expectations because you know not only

did it get to

35k by you know by November by December

Bitcoin was in the low 40s you know the

the low to mid- 40s so it certainly

exceeded my expectations back then but

you can see what happened right it was a

selloff into into the death cross a

rally to the 50-day a rejection for

about a week go to the 200 day rejection

for about a week support at the 50-day

go up if you look at it

today you saw a pretty big selloff into

you know before the death cross but then

going into the death cross you actually

had a local top as the death cross

occurred now this time we've been

rejected by the 50-day SMA for you know

well over a week right it's actually

been about 2 weeks now and Bitcoin has

been unable to really get through its

50-day SMA now the 50-day SMA for

Bitcoin is around

61.5k we put out a lot of videos back

over over here saying that look if

Bitcoin can't get above

62k and get some daily closes up there

well that presents a problem because you

know in 2023 Bitcoin was able to get

above the 50-day moving average and you

could argue like why is it not doing it

this time you know why is it not perhaps

it's the labor market you know showing

some weakness perhaps it's you know the

sticky inflation that you know is it

actually going to go back down to 2% or

is it going to re accelerate there's

there's uncertainty for

sure um so that still presents an issue

so then it makes sense in my mind to go

back to the year we've been comparing to

all year and that is in fact 2019 and if

you're new to the channel the reason it

makes sense to at least think that 2019

is a worthwhile comparison is because it

was actually in 2019 when the FED cut

interest rates right and so it was also

in 2019 when gold broke out of of the

range highs that had been holding for

quite a few quite a number of years and

when that happened Bitcoin generally put

in lower highs and lower lows until we

really got into the tail in rate cuts

and and QE began so you can see that

Bitcoin held that lower high and lower

low structure and back then after gold

broke out and after the death cross or

going into the death cross what happened

was that Bitcoin had a rally into the

death cross right and you can actually

see it did the same thing it did in 2023

and it sold off into it and then rally

up into it that was actually why back in

2023 I said the most likely outcome

going into it was to First sell off and

then rally into the death cross right

that's why I said that back in 2023 and

I got you know I I feel like I nailed

that part of the move sort of this you

know the sell off into the death Cross

or just beforehand just beforehand and

then rally up into it but you can see

that this one was a bit different

because it sold off into it but it

didn't get that same immediate Spike

like it did in 2019 right it was a

slower grind up you know rejection slow

grind up rejection and then go up in

2019 it looked different than that right

you you you had the selloff you had the

sell off just before but then instead of

that slow move back up it was a very

aggressive move back up that then just

slowly got sold off for a number of

weeks until it faded and eventually put

in a lower low so you know when we talk

about this stuff about you know the

50-day SMA the 200 day SMA and and

what's going on and is it more like 2023

is it more like 2019 you can see that

the spike following the pre-death cross

selloff was also somewhat aggressive

right it wasn't the same type of move

you saw back over here that was sort of

a slow grind up you know sort of

staircasing up right it wasn't that it

was more so just a rapid move back to

the upside and then a slow fade after it

so again there are some nuances to it

that are worth noting now I don't want

to spend the entire time on the 50 a and

the 200 a may obviously you know it's

it's this video is about the bullmark

sport

but in the short term Bitcoin has been

having some trouble getting back above

its 21 week EMA okay I mean that's

pretty clear every every Spike we get by

Bitcoin it you know we we just continue

to see rejection rejection after

rejection after rejection one of the

things I've said many many times as it

relates to you know Bitcoin and and

Bitcoin dominance and whatnot is that

until dominance goes you know to to

where I think it's going to go around

60% the argument is that Bitcoin is just

still stuck in this wedge until

something changes right until that

actually changes um Bitcoin is is

theoretically stuck in this wedge

meaning you know if that were to play

out until that happens you would not

expect Bitcoin to make a huge move in

either direction right whether it be you

know above above the channel or below

the channel right whether it's whether

it's back back up here or back down

here and the reason is because it's

still absorbing all the liquidity from

the altcoin market okay now one thing to

consider with you know this cycle and

Bitcoin and and I I think a lot of

people sort of made the mistake of

thinking that this was like 2020 when in

fact it really hasn't been and and you

can actually make a lot of comparisons

2019 in the sense that you know Bitcoin

has stayed above its bullmark s end for

long longer than than say the altcoin

market right if you were to look at the

altcoin market total three while Bitcoin

spiked above the bull market support ban

a few weeks ago the altcoin market did

not right the altcoin market just put in

a lower high where it got rejected at

the 20we SMA right it was just a a lower

high and so you know that to me is still

reminiscent of what happened in 2019

where all the moves by the altcoin

market were just rejections at its bull

market support band and note that in

2019 before you know before rate Cuts

arrived Bitcoin sold off and it and it

or sorry the altcoin market sold off and

it was at the 20we SMA and really

started to put in weekly closes below

the bullmark sport Ben in August whereas

it took Bitcoin until September right so

it took a little bit longer and the

reason is because Bitcoin was holding up

better than the altcoin Market because

liquidity was flowing from alts to

bitcoin rather than the other way around

and theoretically the reason for that is

because people were more worried about

you know the economy and if they're

worried about that and and you know and

we also had an inverted y curve back

then also going through quantitative

tightening rather than quantitative

easing during that process alts tend to

bleed to bitcoin and during quantitative

easing Bitcoin tends to bleed to alts so

that's why alts generally lose the

bullmark sport band before Bitcoin as

you get later and later into the to the

business cycle so when I look at at you

know where Bitcoin is in this cycle I

still can't help but draw the

comparisons to the 2019 move um where it

was just a series of lower lows and

lower highs and then you could argue

that after the FED started QE we got a

few rate cuts under our belt Bitcoin

then broke the lower high structure

right it broke the lower high structure

but it didn't break it until January

2020 so from the first from the local

top if you want to call it the midcycle

top it took about 28 weeks for Bitcoin

to break that structure of of lower

highs right so if you were to look at it

today to give you an idea of like what

it would line up with you know from the

March top 28 weeks is still not until

the very end of September and that's if

it just follows what happened in 2019

now remember in 2019 while it broke the

structure we ended up getting a

recession induced by the pandemic um and

then we put in a lower low once again

but the interesting thing about that is

if you connect the dots here you know to

to to these lower lows and lower highs

that were put in the the final lower low

on the weekly close still stayed within

this channel you did Wick well below it

but it did stay within the channel at

least the weekly close Okay so

you know when you look at it over here

we already did have a week where Bitcoin

did Wick below that level um and I'm

curious right I'm curious here if we're

going to sort of you know are we in this

phase right where it it you know it

comes down it it gets a move back up

kind of like what happened right there

in 2019 and then it it sells off to a

new low and then it consolidates at some

lower levels for a while and then maybe

you know in a month or two once we get

to better seasonality we get another you

know Bitcoin takes another uh try at

getting you know taking out the lower

high structure um but it is you know it

is a long and Grilling process if you're

losing interest you're not the only one

okay if you if you go look at the social

risk it is relatively low there's not a

lot of people that care and the reason

and this is why we talk a lot about

dominance and one the reason because

people a lot of people's social interest

as it's tied to the cryptocurrency asset

class is mostly based on how altcoins

are doing not how Bitcoin is doing and I

know a lot of people are like well that

doesn't make sense but it's true if if

altcoins aren't doing well people tune

out because the reality is that most

people are are trying to figure out a

way to get rich quick and so they go buy

altcoins rather than just kind of

sticking with with

Bitcoin the the harsh reality for a lot

of altcoins um sort of the sobering

reality is that Bitcoin is at a price

that it was at for the last several

months right it's been around this price

for a while the issue for the altcoin

market is that that's not true right

altcoins haven't really been at these

levels for you know I mean the the lower

low and lower high structure is a lot

more clear with the altcoin market than

it is with Bitcoin now it's playing out

for both Bitcoin and altcoins but it's

more obvious with the altcoin market

it's more it's a lot more obvious I

think and so I I think that the altcoin

market is is basically doing the same

thing over here and doing it again I

think a lot of people made the mistake

and I I tried to warn people they they

made the mistake of assuming that when

alts were holding here above the

bullmark sport band they made the

mistake of assuming that they were doing

this right here but the reason that's

not the case and I said this many many

times before is because all Bitcoin

pairs had not yet broken down right so

if you overlay again total 3 minus usdt

divided by Bitcoin you put it on the

same chart we'll actually flip it over

to a a um a new scale so we'll pin it to

a new right scale um we'll take that

back to log we'll put this on log and

this is what I you know what I

previously said is that you know the

reason that alts were

not doing this move right like the

reason why this move here wasn't the

same as this one was because all Bitcoin

pairs had not gone to the range lows

like they already had at that point in

the last cycle right they had not

already gone down here and so because of

that it made more sense to think that

alts were actually here rather than

here here where they sort of get one

move up right they get one big move up

they pull back to the bull market

support band get support and then go up

into a sort of midcycle top if you

will and that seems like that's what

happened right I mean after that bitco

you know alt fell back to the 20we SMA

Consolidated for a while around it just

like they did there in 2019 and then

ultimately fell below and then every

time they go back up they just get

rejected okay and and I I think that is

ultimately what we're seeing happen

right now in the cryptocurrency asset

class and I think the only real way

we're going to get out of this is once

we go back right to looser monetary

policy we go to lower interest rates

theoretically the FED pivots from QT to

QE and then you might see something else

play out but you know that's kind of

where we are right now and and we'll

just take it one day at a time so you

know those are my views on the market

that's where we are in terms of Bitcoin

and it's 20we SMA 21 we

EMA again the the main lines in the

stand of

watch are going to be you know 61 to

63k uh as it relates to the bullmark

sport

band and as it relates to the the death

cross that

occurred it's the 50-day SMA and the 200

day

SMA

which you know Bitcoin needs to get

above those and those are at 61 a half

for the for the 50-day and 62.7 62.8 for

the 200 day which again is essentially

where that bullmark sport

range is you know 61 63k in that in that

area and you can even overlay it right

if you overlay the bullmark sport pan on

here you can see that the 50-day SMA and

the 200 day SMA are you know um within

the the bullmark SP and that has been

providing a lot of resistance for

Bitcoin for the last several weeks so

you know we'll see what happens but

those are my views on the market and and

again my guess is the negative

seasonality will will continue for a

little while um that I mean that doesn't

mean Bitcoin can't go up right I mean

it's gone up for the last uh I mean if

you measure it from August 5th it's gone

up for you know a little bit since then

uh but still struggling here at the at

the bullmark sport B if you guys like

the content make sure you subscribe to

the channel give the video a thumbs up

and again check out the sale on into the

cryptoverse premium at intothe

cryptoverse decom I'll see you guys next

time bye