Within the market update I will share my current outlook on the cryptocurrency markets. In the Bitcoin market update I will focus solely on the corn. Will do a general based update in the future as well, where we will look at potential Altcoin opportunities for the short, mid and long term

Before we jump straight into it a brief outlook on my behalf. This is my first market update on Bitcoin and the start of a weekly series. I will post a new market update weekly where I analyze the current situation for the price of Bitcoin based on different time frames and indicators.

Every once in a while I will add a general market update in between, as soon as I see good content for an analysis on different Altcoins as well. Feel free to share coins you wish to be examined and talked more on here.

For those with only very limited time I sum up my findings down below #tldr for a quick update and my own opinion on Bitcoin.

Monthly

As you can see on the chart below Bitcoin on the monthly time frame printed a bearish divergence on several indicators, like the RSI, the Stochastic and the FSR by the close of November. Since then the price dropped from around $57.000 to $48.000, by the time writing this article, which is a decrease of 15%. The low on the 4th of December even dipped to $42.333 which reflects a drop of 25% in comparison to the monthly close of November. For those of you being around for a while in the space, this is nothing new and Bitcoin does this quite frequently even in bull markets. I just wanted to highlight that divergences are something to have an eye on. Nevertheless, they do not always play out.

Another sign of weakness in price action you can find is in the volume, the volume never really came back after January 2021, even when Bitcoin reached a new all time high (ATH). So leads us to the assumption that, although Bitcoin did run to new highs, it did not attract too much capital to jump on board of a hype. Maybe those that jumped in on top of the price January did not recover yet to be willing to buy another high.

In terms of market structure for the monthly I am not yet concerned by this drop, as mentioned above this is pretty normal for Bitcoin and also happens in bull cycles. Market structure is still bullish with having higher highs and higher lows. A level of concern for me would be a monthly close below $35.000, the latest low marked in June / July.

To sum this up, it is always worth to have a look on the monthly time frame to get an idea of the big picture.

Weekly

So let’s jump over to the weekly and have a look what’s the story over here. What do we have? First the picture for divergences is not as clear as it was on the monthly. There is one for the Stochastic and as well for the FSR, but the RSI went in accordance to the price with a higher high on both. But, something you can take away from the RSI here, is that the RSI never reached any of those levels from the parabolic bull run in late 2020 and early 2021.

Same applies to the volume, that steadily dropped lower although the price was reaching new highs. So, both momentum and volume on the weekly showed that a new parabolic run after Bitcoin rose to a new ATH was rather unlikely and the hype was not there yet. Therefore, the most recent drops in price were not at all surprising after all.

Regarding market structure similar to the monthly I see break in the bull trend here, at least for now. Since the lows in June we saw higher lows and higher highs. Not change here. Yet? - Another thing I am looking at here on the weekly are the EMA, in this case the 21EMA and the 55EMA and as you can see both are being bull-crossed (meaning 21 EMA is above the 55 EMA) since May 2020 and the price is living above it the 55 EMA since April 2020 with a short exception July where it lost the level but immediately reclaimed it the week after.

Summing up the weekly, a drop was likely to happen based on what we could observe here as well. Still the bull market is still intact and only a close below the area around $43.000 would bring uncertainty in regards of my directional bias for the weekly.

Daily

Having the monthly and weekly covered, it is not time to look at the daily time frame. The time frame most likely to be consulted by the most traders the most. While I am looking at the monthly only every once in a while and weekly most often once or twice a week, the daily is my go-to time frame on a daily basis.

Since the last ATH on the 9th of November price decreased by 39% and is currently sitting around a 30% discount. One of the main indicators I am looking at around the current level is the 200 EMA. The 200 EMA acts as a very reliable area of support and resistance. So price usually reacts quite significantly around the moving average. For example on the dump down to $42.333 the priced wicked down, but came back pretty much immediately close to the 200 EMA and closed right below and reclaimed the level only two days later and just lost it again yesterday. Ranging around these areas of significance can be seen quite often, as bulls and bears are fighting to gain momentum in either direction.

For me it currently looks like the bears are winning the fight and we might see lower prices within the next days. As you can see my directional bias for the daily switched from bull to bear on the 3rd of December. RSI ranged below the level of 40, Stochastic failed to cross above 50 and my DBI indicators flipped red as well. Before there were signs of being cautious, but this flipped my short to mid term view to bearish for the daily. Important this is only for the daily time frame, as I stated in the section above the general mid to long term bias remains unchanged and is bullish.

#TLDR - Summary

Having looked at the monthly, weekly and monthly time frame brings to a following outlook on Bitcoin. The monthly and weekly time frames were due for a correction, which is a normal and needed occurrence even in bull markets. There were several signs for a drop in price and they played out very nicely, like bearish divergences and loss on volume. The overall directional bias remains untouched for the said time frames and is still bullish. Market structure is intact. So far we are only accumulating and correcting after the rally from June/July to November. The level of $43.000 needs to hold on the weekly close.

Other than it I can easily see a drop on the daily to the are around $40.000, intra-day wicks even lower to the mid thirties. As the volume is currently stagnating or even decreasing a little I could imagine some time accumulation between $55k and $40k. Once we detect an increase volume and a change of tone on the daily time frame we might be ripe for an attack on the ATH. But before we can talk about that, I will probably write a couple more market updates here. As I like to say, let us look at the market from station to station, everything else is peeking in a crystal ball.

Should we lose $40k on a daily close or close below $43k on the weekly we open the door for a longer correction. Until then I look for volume coming in and leading the way more to the upside. Currently flat here as the confluence between time frames is missing and direction is not clear yet. Until then stay tuned and keep safe out there.

Have a great weekend all of you!