Market Update | Oct. 23, 2022
This week in crypto has been quite mellow despite a $114 Mango Markets exploitation that was presumably solved by the exploiter outing himself and returning most of the funds.
As far as price action goes, there is seeming to be a glimmer of hope for the bulls out there.
From the BTC chart below, you can see that the last few days have been bullish, & we've just broken out of the bottom zone and above the Point of Control (Green Line) after trading below the Value Area Low (Bottom Blue Line) a few times.
The only problem is that the 20 (Blue) & 50 (Pink) EMA are still quite far apart. What would really give the bulls hope is if the 20 EMA crosses above the 50 EMA and we start to see more buyers come into the market on a daily level.
For BTC, the highest volume area is right at the Daily Point of Control at around 19,155, so definitely keep an eye out for that zone.
One more point to note that could add to the notion that we do have bullish price action coming is looking at USDT dominance.
Typically when USDT dominance rises, that means more people are transitioning from holding crypto assets to a more stable currency with the idea that the value of the crypto assets are going to fall which we have seen in the recent markets.
As you can see from the chart below, USDT dominance has been rising as a direct result of BTC price action falling.
Now, it should be noted that it isn't going to be a 100% opposite chart because there are thousands of other crypto assets that come into play when talking about the dominance of USDT.
But, as BTC being the leading cryptocurrency, it will definitely have a major impact.
So, looking at the USDT dominance chart, you can see that it is still overall bullish meaning the true sentiment of the market hasn't shifted just yet.
But, you can see some exhaustion at the top of the chart there of the Fixed Range from the middle of June, 2022 til now October, 2022 & we have just traded above the Value Area High (Top Blue Line), which is the exact opposite of what we've seen Bitcoin do.
What is probable for BTC & USDT is that we could see Bitcoin have a short push to the upside in the coming days, to potentially retest the 20,000 mark and potentially even the upper zone of the range we've been trading in, should we find support above 20,000. For USDT we could potentially see a reversal from where we are at now to at least the Daily Point of Control (Green Line).
Subsequently, other crypto assets would likely see a short term rise as we have been mostly trading in a tight range for quite some time with the inability to push lower.
As for the DeFi Market, it is looking quite similar to Bitcoin. We have been finding support at the lower zones with what's looking like more bulls entering the market than bears trying to push price lower.
Similar to BTC, we have traded below the Value Area Low (Bottom Blue Line) quite a few times, always coming back to retest the Daily Point of Control (Middle Green Line).
As for the few times we've found support above the Daily Point of Control, we've continued on to trade to the mid range zone (Blue Box) & once to the Value Area High (Top Blue Line).
So, should we be able to break above the Daily Point of Control (Middle Green Line) and find support, it is most probable for us to retest that mid range zone (Blue Box) as target one, and if we can find support above the blue box then we can be looking to retest the Value Area High (Top Blue Line) or the top zone as target two.
One other thing to note for the DeFi index is that the Value Area Low is at an exact weekly level that we have been proving to respect very well which is another reason price is looking more to the upside than to the downside in the near-term.