Eroneus Punk
Eroneus Punk 2 minutes reading from Bitcoin

Opinion: The Underdog Image of Bitcoin (BTC)

BTC / DIA Please let me explain this ugly chart. Among correlated assets I always use the most liquid and strongest instrument on a relative basis as the denominator in making assessments. In equities throughout 2022 that has been DIA.

Bitcoin breakout/ outperformance against the leading equity index has been one of the earliest signs of a new bullish cycle (along with sustained dollar declines). In this case the divergence in structure between spot BTC and the DIA pair is quite interesting.

On BTC/ DIA we are only testing the bottom of the wick of Nov 23 weekly candle, much further from shelf which is analogous to 19K in spot.

Similarly it is clear that a reclaim of that level has little resistance until 32k analogous levels *and* that a rally into that structure (given the weekly cloud setup) would very likely be the *first* major bear market rally.

BTC/ DIA The other thing I think this chart communicates is that the majority of the pressure in crypto this year has come from 1) correlation to equities (in a bear market) and the 2) structural weaknesses/ facades, which obscured by bullish PA and subsequently unraveled.

This post is based on this twitter thread.

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