BITCOIN, CRYPTO, STOCKS is This the BOTTOM???
Weve got a little bit of a rebound day today on friday. Turnaround tuesday is turnaround friday. This week, markets are up dow jones 1.4 percent s, p up 2.37, nasdaq up almost 4 at 3.92, so good day for traditional markets. Nice little balance obviously still going to finish with one of the biggest down weeks, um in a long time for the markets. So uh well just have to keep our eyes on whats going on there. Elon musk is negotiating with twitter a little bit of back and forth going on right there and, of course the markets havent closed. Yet so we got to watch that momentum into the close, and you know still a lot of uncertainty out there in the economy with the fed just getting started on their tightening program with inflation running wild. The fed is going to have to get more aggressive, so markets are taking a little breather before the next leg down and yes, theres going to be another leg down, so just get ready for that enjoy these little bounces while you got them, but this is not A reversal: this is a bear market rally. Just a little relief bounce and um more uh tightening is coming, which means the more downside is coming and were gon na go over. That right now lets jump into bitcoin. The big question of the day is: has bitcoin bottom have have crypto bottom. Is this the bottom for bitcoin and crypto? This is bitcoin on the hourly kind of looking like it wants to turn around and confusing everybody, but before we get into that, lets, take a look at the dow, real, quick and what weve been tracking is that pre pandemic level on the dow of about 29 30 000, so basically, that would be another 8 from here, which is pretty reasonable, considering what the fed would likely be targeting before they want to get involved in anything would be an overall decline of about not even 20 percent, really so thats still not even bear Market territory, so the dow could get probably well below that before the fed would intervene typically about 30 to 50 is where the fed jumps in and thats back down to those uh march pandemic.
Lows on the dow, the nasdaq is probably getting a little bit closer lets. Look at uh, 30 down so yeah, 30 40 pretty pandemic level right here before the march sell off on the nasdaq and the snp. That would be a drop for the s p. At 30 percent will put it back down in that area, so the targets are these uh pre pandemic highs back in that level, somewhere from that 2018 high to pre pandemic high somewhere in that range is probably where the fed has tolerance before theyre going to do Any kind of a reversal unless something else breaks like the bond market, credit markets, uh, something like that interest rates are continuing to rise, so housing is starting to soften all over the country. You can look at reports out there about home builder sentiment what the home builders are experiencing. They are seeing contracts, cancel theyre, seeing you know very limited traffic on in their subdivisions, uh, so thats where it starts. It always starts with the home builders. First, you can also look at zillow and watch properties in your area. You will see multiple price reductions, youll see days on market going up and youll see. You know houses come back on the market that were uncon under contract before because, basically, the buying power of the buyer has been basically cut in half from an affordability standpoint. So a lot of adjustments going on lets, jump back into the charts and take a look at bitcoin and well go through a couple of things on bitcoin.
This is bitcoin on the daily. So when you look at the hourly uh, there was obviously a nice little bounce, a lot of the cryptos bitcoin bounced overall 21 from this low at 25 4. uh, some of the other altcoins about 30 40, 50 percent uh off of their lows and the lower The prices get the bigger the bounces can be ive been watching proppy. Of course, luna. I made a little trade on luna that uh so far has not worked out too well, but it was a very small trade um. I definitely do not encourage anybody to do that. Who knows whats going to happen with that uh and then ive been kind of watching eight coin apecoins been kind of having some action, but heres a big bounce right here on mana. This is an example. It dropped all the way down to about 59 cents, so it didnt take much to get a 99 96 bounce out of that so thats something to kind of keep an eye on when these uh all coins that were doing really well in the four five to Ten dollar range drop down into the dollar and change ranges: uh 50, 60 cents or dollar range. You can get some nice little bounces out of them, but they can also go the other way, so its all about risk or reward in terms of what youre uh willing to tolerate and do. But lets take a look at bitcoin because, as goes bitcoin as goes the rest of the market right so bitcoin goes down, all coins can drop.
You know, as youve seen they can still drop another 50 60 70 from where they are right now. So you have to be prepared for that, and bitcoin can too so lets. Take a look at the daily and lets look at log log scale here on the daily and two things to watch out for one that weve been talking about are the moving average. So this is bitcoin on the daily still below all moving averages. So a reversal, i would not become confident in a reversal till you get back above that 200 day, moving average thats critical for stocks, its critical for bitcoin and crypto. You want to be above that 200 day moving average to look for any kind of reversal, or you know definitely bull market activity youre above all of the moving averages, but lets look at the something else here. Thats been interesting to watch. Uh is the gaussian channel on the daily we havent looked at this a whole lot well, look at a little weekly, but you can see that its turned red on the daily after this little green patch and then thats when you had a big drop where bitcoin Had a big drop! So if you look at the last couple of times that happened, these drops were somewhere around a total about 42 percent there last summer and then most recently after christmas 40. So lets take a look right now where were at uh 35.
So where would 40 put you uh 40 would put bitcoin around 23.5 to 24 000.. So keep that number in your mind, 23 to 24 000. uh, the march pandemic. You really cant look at that, but lets just look at it. That was a little bit more. That was a 53 percent drop. Then this little rally, 2017 2018 drop was about 32 percent. You know after that, little rally after the bottom and then this big drop here, the final capitulation of 2018 49 and then the first capitulation of 2018 from the time it broke the in on the daily dropped, 42 percent. So if you say 40 42 from where were at now again thats going to put you down around from the time it broke the channel uh around 23, twenty three thousand dollars so somewhere in that twenty, two five to twenty three thousand dollar range and the reason I say lets keep an eye on that because when you switch to the weekly and if you look at the gaussian channel, it hasnt turned red yet its still in the green but anytime its broken below it has broken down on the weekly ‘ percent. The last time in uh, 2018 and then 2014. same thing, i was 55 percent, so lets take a look at where this last one was 40. So again, lets take a look at 40 on the weekly 40 on the weekly puts you at about 20 000.
. So in that 20 to 23 000 range so lets take a look at one more thing. The moving averages so weve been talking about. This were heading for this cross here, where the 50 week crosses the 100 week, uh and anytime. Bitcoin is broken. That 100 week moving average, it goes down and touches, and sometimes breaks below the 200 week moving average right now, the 200 week moving average is coming in, depending on where it hits around 20 to 23 000, depending on when price gets to that level. So it seems like its its definitely heading in that direction and again its just done it every single time. So uh last time was back here in march of 2020. It broke below it. That was a severe situation uh prior to that it was 2018. It bounced on the 200 week moving average a couple of times uh and you can see it dropped down. Had a little relief rally dropped down hit. It bounced hit it again and took off. So how do you know when you bottom? You can look for this on the 200 week moving average, so right now, breaking down got a little bit of a you know, buying it up a little bit kind of looking at back in 2018 same kind of action, so you could see price trickle down in There bounce along the 200 a couple of times and then take off from there, so it looks like price wants to go down to that 200 week, moving average like its done pretty much every time in its history when its broken 100 week, its always gone down To that 200 bounced along the 200 before reversing first sign as you get above that 50, then you get back above that 100 week same thing here above the 50 above the 100, and then it broke down march 2020.
On you know, the bull market was back on right in this area. Before that pandemic happened, it would have probably taken off right in this area here. So once the price touches, the 200 weight gets back above the 50 week and then ultimately the 100, because these averages will move and cross a little bit once it gets down. There then thats, when you can start looking for a full full on market reversal, and you know thats just the way things have worked out in the past. If you look at bitcoin on the daily, you can kind of look at these bottoms that bitcoin has had in the past and how things kind of work and lets look at them on that uh moving average situation again and again price. You know, as long as its below all the moving averages you cant look for any signs of reversal. You got to see price get up back above these moving averages again in order for bull market to be on. So these are the things that im looking at in terms of a price reversal. We have the weekend coming up, so no telling whats going to happen there so right now, i fully what im expecting unless the price breaks back above forty thousand so thats thats, something that can negate all this. If price breaks back up above forty thousand uh, which would put you if you, if you look at the daily lets, just take a look at the daily so that forty thousand ranges back up here.
Okay, so thats back where price was back early part of april late, part of may. If you break above 40 000, then you can kind of look at a reversal at that point. But until then its just kind of noise, you know bear market rallies and if you look back uh last summer, you can see some of these rallies are pretty good. I mean you can get some 30 percent 25 rallies, as the price is bouncing along trying to figure itself out so um just be careful im not saying this is not uh. You know an attempt at a reversal, or you know, could be a reversal, but just based on history, based on what the charts are showing and saying and based on you know all past examples that we have, which is all we can work off of, is probabilities Possibilities and what has the what has price done in the past because it just plays out over and over and over and as weve seen with theories of lengthening cycles and all of those types of things you know it just keeps repeating itself so uh you have To keep an eye out for that, especially with all the things that are gone going on lately with luna and all that well just have to keep an eye on that see how that resolves uh.