Bitcoin: Bull Market Support Band
Summary
TLDRThe 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
📈 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.
📊 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.
🤔 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.
📉 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.
Mindmap
Keywords
💡Bitcoin
💡Bull Market Support Band
💡20-week SMA (Simple Moving Average)
💡21-week EMA (Exponential Moving Average)
💡Death Cross
💡Seasonality
💡Quantitative Tightening (QT)
💡Quantitative Easing (QE)
💡Altcoin
💡Dominance
💡Social Interest
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
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