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Daily Bitcoin and Crypto Analysis

Daily BTC Analysis

August 24, 2021

Bitcoin is largely unchanged today, as the first attempt to jump past $50,000 hit headwinds. This was to be expected, and now the real question is: will nervous longs feel the need to sell Bitcoin should the market move back down towards $47,500?

In a rare mention, ETH has also stalled at resistance set last week, overall, this has the feeling of a local top for crypto.

This week's annual Fed Jackson Hole symposium (posh word for meeting) will take place online, due to fears over the delta variant of Covid-19. This may keep Fed members from catching a cold, but if the Fed signals an early taper of their expansive monetary policy, the stock market will sneeze, tears will fall, and with it, your net wealth. Something to look forward to.

Crypto is still 2021's best performing asset class. The worst? Oil and Gold. Sympathy for the Luddites? None.

Bitcoin miners are still sitting on their hands: It seems they won't be selling at $50,000. We have been patiently waiting for the miners to draw down their BTC holdings. I'm still happy to call such a move a sign of confidence in the market, until we hit $55,000—then I'll re-label it greed.

We are also observing derivative inflows increasing, again outpacing inflows to spot exchanges.

Which means the leveraged crowd is confident. It could be that the liquidation event we have been waiting for is actually below the market, not above it.

Open interest across futures exchanges is continuing to grow, generally a very supportive sign of trend strength.

Except for when it coincides with a reduction in trading volumes, as seen below.

This is a warning sign that as lovely, timely, and wonderful as this rally has been, the headwinds of the Fed, $50,000, and the muted effect of PayPal announcing their entrance into the UK market, could put it on ice.

Technical Analysis 

Momentum remains in favor of the Bulls as the MACD oscillator is positive and the 50-day moving average crosses through the 100-day, giving positive signs of further upside. There is resistance at $51,125 before the next level at $57,750 and then the ATH of $65,000. There has been limited opportunity to buy, with very shallow pullbacks and retracements. However, we see support on the daily chart near last week’s low of $43,900 and then more solid support at $42,450.

Bitcoin remained in an upward sloping channel over the weekend and into Monday trading with support now seen at $48,125 and $46,775. A key driver in today’s rally was PayPal announcing expansion of Bitcoin and Alt services into the UK. Bitcoin rallied straight through the psychological $50,000 barrier. Clearly seen as positive for all cryptocurrency, the larger ALT coins also had stellar performances, notably ETH, ADA, MATIC, and BNB. Bitcoin resistance on the intraday is now seen at 51,125 and 57,750.

Confirmation of a bullish scenario is best seen on the bigger picture where the weekly is showing a strong MACD and bullish momentum. A large multi-month rally potentially unfolding with very little resistance as bears continue to get liquidated on futures. The Total Market Cap is well and truly through $2 trillion with continued talk of institutional buying. Add in the fact that governments are now playing catch-up in the regulatory and compliance landscape, as they concede cryptocurrencies are an asset class and here to stay.

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