This needs to happen to reach 32K!
This needs to happen to reach 32K! Consolidation on consolidation on consolidation. In 2023, all markets are actually performing very well, and we see a continuous rise in the world of traditional finance (tradfi). Of course, crypto hasn't performed poorly either, as we've been in a strong uptrend since January. However, the market is simply challenging to maneuver, especially when it comes to the lower timeframe. We observe long periods of sideways price action, followed by explosive upward price movements. Currently, we are still in a consolidation phase, but personally, I believe that we can still see higher prices in the midterm. But what needs to happen to see higher prices for BTC and the overall cryptocurrency market? We'll make this clear by presenting the high timeframe picture in today's trade letter. Enjoy reading!
BTC-USDT
Monthly timeframe
The monthly timeframe clearly shows that we are in a bullish market structure. We can see that all Fair Value Gaps (FVGs) are being respected. These FVGs are considered a draw on liquidity, as they represent internal range liquidity. Prices tend to gravitate towards these levels. We can clearly see that there is a monthly Fair Value Gap above us, and I also think that this will be the area where prices will move towards in the midterm.
Weekly timeframe
However, there are a few things I would like to see before anticipating any trades. I would prefer to see a move downwards first before we continue the price uptrend. The weekly timeframe shows the following: we have mostly seen sideways price action, and after the upward impulses, we have consistently left an imbalance on the weekly timeframe. We can see that after a period of consolidation, we test this imbalance before making the next move. On the spot pair of BTC, we haven't had this backtest yet, and I would like to see it before further upward movement. I must also mention that different futures charts show that we have experienced a dip, but I am not entirely convinced that it has been enough.
I should also mention that we could drop quite significantly and still be in an uptrend.
ETH-USDT
Weekly timeframe
Ethereum is lagging behind Bitcoin. After setting the high in April, ETH hasn't done much and has mostly moved sideways. There seemed to be a shift in momentum after the news about Ripple last week, with more strength seen in Ethereum, but this momentum quickly faded.
Looking at the weekly timeframe, I would also say that we need to move downward before continuing upward. My focus is on the weekly imbalance below us.
Daily timeframe
The daily timeframe clearly shows why I personally believe that we should move downward first. Last week, we had a sweep of the high, followed by a strong rejection. There are failure swings below us, combined with the previously mentioned Fair Value Gap on the weekly timeframe. I believe that the price will move towards this area before potentially going further up.
DXY
Monthly timeframe
One thing that stands out is the relatively disappointing performance compared to the very weak dollar. The dollar has been very weak in recent months, but this hasn't been reflected in strong performances in the cryptocurrency market. Additionally, I think we are going through a bottoming process on the DXY after taking liquidity from the monthly FVG. Therefore, I'll be looking at external liquidity for the DXY in the coming time. It will be interesting to see how crypto reacts in that case.
That's it for today; we can acknowledge that the market is challenging, but that's why it's important to zoom out. The high timeframe is clearly still in an uptrend, so it's essential to focus on that to potentially maximize your profits.
Until next time!
Written by: Daan Foppen
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