Bitcoin struggled again during the week ending May 30th, initially rallying a bit to the $37K level before the sellers stepped in, pulling back to the 50 Week EMA. This is a bearish succession of candles, of course, however, the uptrend remains well in tact as long as BTC continues to trade above the 50 Week EMA.
(May 29, 2021 8:30PM EST)
Short-Term
All eyes are on Bitcoin as it continues to drift back down towards the 50 Week EMA. If we get an impulsive bounce or a higher high, then we'll consider the short-term downtrend concluded. If we see recurring tests of $30K or worse, an impulsive break below, then a test of $20K is in the cards. $20K would be our line in the sand; a break below there would all but kill the uptrend. However, a violent bounce off $20K would be extremely bullish and probably give us our first green $10K candle as BTC puts in a long-term higher low.
Bitcoin Dominance also appears to be stabilizing, bouncing off the 40% level and now trading sideways in what will probably be a 1-2 month consolidation pattern as capital rotates from cratered altcoins into BTC. This makes sense as Bitcoin tends to be a market-mover and often precedes all other cryptos in bull market rallies.
Where are we in this bull market cycle?
With many calls that "the bull market is over" and "the top is in," sentiment appears to have reverted from extreme greed to fear in less than a week. Meanwhile, fundamentals are stronger than ever and nearly all indicators point to a six-figure Bitcoin price by EOY. In my estimation, we're at the "First sell off/Bear Trap" stage. This puts us up significantly from the bear market lows and even the previous ATH at $20K, but at a healthy discount form the current highs. What typically follows is a "boring" consolidation phase in which momentum rebuilds and confidence returns to the market over time.
Looking ahead, assuming the macro uptrend holds and demand continues to remain constant/grow, we're only a matter of weeks away from a new ATH, and only a few months away from $100K+ BTC.
Long-Term
BTFD. Fundamentals have not changed. Daily and even weekly charts will show relatively large corrections; this is standard bull market behavior. Now that another altseason has been spectacularly squashed, this sets us up for another Bitcoin leg up to new highs, likely $75K+ and higher. By nearly every measure, we are nowhere near a top; in fact, we are maybe halfway through this bull market. What do you do during bull markets? Buy. The. Dip.
Support: 50 Week EMA at roughly $30K.
Resistance: $40K, then $50K.
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