Well, BTC lost the June lows. Is it "broken" enough to take us to 10-14k? Let's have a look 🧵👇
1. BTC weekly outlook:
It seems that the war between CZ and SBF has not helped much fo the market. Instead, it caused more harm.
While technical analysis is not resistant to market manipulations, we can still draw some conclusions by looking at the yearly lows breaking down.
2. Of course, there's no way to know for sure what will happen, but it is believed that when the support breaks, for whatever reason, it's more bearish than bullish.
As trader can often cause a positive feedback loop (extreme emotions), the support breaks can be very dangerous.
3. So, the damage is done.
Even if there is an actual strength at 17000 USD, then a self-fulfilling prophecy can still take over, since traders lost faith in the prior support area.
Because we're talking about long-term support here, the break brings long-term implications.
4. Not only does it put the downward breakout objective at 12000 on the horizon, but it also causes more eyes will start to automatically look in the same direction.
This is where re-distribution process can appear more aggressively.
However, not all is lost...
5. The weekly breakouts still requires time confirmation. Only after the weekly session follows through to the downside, can the signal be valid.
Then, there has been a distinct correlation drop vs. stocks.
While BTC tumbles, Dow Jones breaks out above the bear market trend.
6. What does it mean?
Well, it is the first visible sign of traditional market strength this year, so far.
It's a positive day for stocks amid the midterm elections or the CPI prints, which are due this Thursday.
With high energy prices, BTC may face additional headwinds.
7. Reminder: the monetary tightening decisions from the FED work with delay.
Similar to a big truck in the movement which is hard to stop, a sizeable economy can be hard to maneuver.
The relative strength study shows energy trends would continue higher.
Why is that important?
8. The answer is Bitcoin hashrate,
It represents the network engagement on the computational power side, used to mine BTC transactions.
As the hash rate peaks at New all-time highs consequently, as the prices remains low, it can pose real risks of miners' capitulation.
9. While a lot of retail traders are still facing net unrealized looses (people are mostly lose averse and hold on to their losing positions), the low BTC prices put very engaged miners in a very uncomfortable spot, as they're right at the edge of income distress.
10. With the record hash rate, the increased difficulty and mining costs basically force miners to perform under the water.
In the darkest scenario, the BTC price falls in the deadly spiral of sell-off cascades, as traders and miners race to capitulate one after another.
11. The lower (and longer)BTC stays below 20-23k,the more substantial the capitulation risk becomes.The bottom line is yesterday's events inthe markets separated BTC from the stock momentarily and put the crypto in danger. So, the 10-14k plunge is now more profitable. Then,
12. It'd simply be unwise to hope for the best while hanging right off the cliff.
IMO, it's better to be safe than sorry when it regards money.
Maybe because I often get risk-averse.
But, protecting my capital is exactly what saved me from losing 5 figures on the LUNA crash.
13. Conviction and strict rules can grant you a lot of favours in trading.
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