Halloween is that period of the year when streets are full of ghosts and monsters. At a closer look, they are just kids asking for candies. If you look closely at the latest “spooky” Bitcoin’s dip, you will find many bullish elements as well.

As anticipated, the market was looking for a retest of the first support area . During a retest, the magnitude of the price move does matter! This week Bitcoin dipped below the psychological level of $60,000 just to find another support right above the previous consolidation area.

The price then rebounded back above the breakout level. This kind of price action implies a solid amount of buyer and demand. On the other hand, sellers may not have been satisfied by such a meagre drop from all-time high. Should they manage to push the price to a new lower low, that would open to a more severe drawdown that will allow them to buy back at more convenient prices. The fight is on, and it could lead to a period of sideways moves between $57,000 and $64,000.

What about Alts? They will undoubtedly be those that will benefit the most from this scenario. The rally of Altcoins in BTC prices started precisely at the top of the latest Bitcoin’s run. As the trend began to weaken, investors and traders rotated back their allocation in Alts.

How long will this Alt-party last? Time will tell. Meanwhile, it’s worth continuing to keep an eye on the Bitcoin Dominance chart compared to Bitcoin’s price. This is the single best indicator to optimise your portfolio allocation and boost your returns in times of lower volatility .

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The market always fills the gaps.

Gaps are not common in the crypto market. But, as Bitcoin gain mainstream adoption and more investment vehicles get listed on traditional financial markets, these elements can play a relevant role in how its price moves. Gaps signal strong price reversals and point at suitable price levels that traders can use as support and resistance .

The chart shows the Bitcoin future price as it traded on the CME . The gap around $60,000 in April marked the local price top. The price retested immediately the same level after, and when it failed to break out, the trend lost steam and reversed.

The same is happening these days, the other way around. After breaking above, pushing Bitcoin to a new all-time high, the price pulled back to retest the buyers’ confidence. Should the price hold, the road to $100,000 will be smoother.

Be patient. The chart also includes the other three relevant gaps in the market. Keep them in mind as guidance to place your stop losses. Bonus fact, the BTC ETF is already driving up significantly the trading volume , making this chart always more significant from now on.

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China bans (once again) crypto activities, and only news outlets seem to care about it. The Crypto market reacted differently.

A positive reaction to bad news is one of the most bullish signals experienced investors wait for to assess the market’s mood. You could argue that China’s FUD is now almost no news anymore, but it can always represent a new opportunity for speculators to push the market lower.

The market barely reacted to the news, and it remains in pause mode before moving to the next phase. Looking at the broader picture, you can see how the market moves in cycles, which last on average two to three months.

The chart shows how Bitcoin’s price (orange line) and dominance (blue line) evolved over the last year. By combining both trends, you can evaluate how to optimise your portfolio allocation and what strategies could work better in the next couple of months.

Should the sequence of market phases start back from October 2020, Altcoins may significantly underperform Bitcoin . In perspective terms, Bitcoin Dominance is currently sitting at record lows, which validates, even more, this thesis.

Time will tell, meanwhile better adopt a flexible approach and be ready to handle the next chapter.

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The market is betting which project will be the Ethereum-killer. Solana, Terra, Avax and Cardano have been performing exceptionally well recently. Investors believe they will outpace the “old” Ethereum in the race of scalability of DeFi, bringing crypto to mainstream adoption.

Yet, Ethereum doesn’t seem to be giving up the throne anytime soon. Total value locked in DeFi protocols recently hit a new all-time high, and that’s mainly due to protocols running on the Ethereum network.

Looking at the ETHBTC chart, it’s clear how Ethereum is building a solid bullish momentum. On a higher time frame and on such a large time scale, moves like this happen for a reason. Ethereum has just become more scarce (following the EIP-1559 update), making it close the gap slightly with Bitcoin .

Supply and demand is always the main driver for price and a supply shrink coupled with growing adoption push immediately the price up. Not to mention the increasing number of coins staked in ETH 2.0.

Solana and other protocols are still good investment options that will likely outperform both Ethereum and Bitcoin . But they also carry higher volatility . From a risk-adjusted perspective, Ethereum is now flipping Bitcoin. Institutional investors have already realised that, so more smart money is likely to flow into ETH. Just wait for the next big headline.

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The mood of the crypto market shifted from “a new bear market started” to “long live the bull market” in a matter of weeks.

Looking at the big picture of the crypto market capitalization starting from the bottom in March 2020, things become clearer. The excessive euphoria that grew during the first months of 2021 needed a reset. The RSI captured this general weakness precisely, with lower highs diverging from higher highs during the market trend.

It was easy to confuse the large crash in May with the beginning of a prolonged downtrend period. But as the market rebounded exactly at the bottom of the upward trend, investors and traders found the confidence to turn bullish once again.

The rebound also occurred at the 61.8% Fibonnaci level, enhancing the importance of that area as strong support in the future. In the short term, 23.6% is the first support in case of a pullback. Consolidation in the green box would be beneficial for the long-term development of the trend. Should Bitcoin cool off below $50,000, that could be a good opportunity for Altcoins to have their moment of glory .

Accumulating on dips and scalping long strategies are still the best way to capitalize on the current market condition. The trend is always your friend, after all!

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Technical analysis is a handy tool for traders, but the truth is that it’s not an exact science.

If it were, reading a book would make you a professional trader. Chart patterns may appear different to the eyes of each analyst based on their biases. The first step is to try setting aside as much as possible any belief you can have about where the price is heading next and focus as much as possible on objective elements. This is necessary to use Technical analysis appropriately,

Let’s try to apply this method to Bitcoin’s chart. As time passes, the chart seems to be more likely on the verge of another significant drop. Since June, the price has posted lower highs, while the horizontal support is holding. The question is, for how long? Some traders have raised the idea that Bitcoin is building a massive head-and-shoulders pattern.

For how bearishBitcoin may look like, the good news is that this is not an H&S formation. The “head” is atypical, but what is even less common is how the volume develops. To be a valid H&S , the volume should be higher on the left shoulder and decreasing after that. Conversely, Bitcoin’s volume has been higher on the right shoulder, indicating high interest both for buyers and sellers around those levels. Another good news is that Bitcoin broke up from a similar accumulation period at the beginning of the year.

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Investors and traders are people with emotions, fears, and biases. To overcome the uncertainty of every aspect of daily life, they need things that give them a feeling of safety. Bear market, Bull market, Or?

Assigning a specific “label” to events, objects, or other people’s behavior helps everyone categorize what happens around us to fit our mind schemes.

When trading, often happens the same process. It has been weeks now that traders struggle to answer the question, are we in a bear market?

Why is that so important to assign a label to current market conditions when you need to look at the price?

Interestingly, in 2019, the price of Bitcoin increased by 200%, but no one recalls a Bull market in 2021, even if such performances in any other asset class may have been well labeled so. That’s likely because crypto price moves have a different scale.

Fibonacci retracements are a valuable way to gauge the magnitude of a price move. Despite the 200% surge, Bitcoin only retraced 61% of the drowdown experienced during the Bear market. Applying the same logic to the current price action, Bitcoin has found support precisely around the same 61% level calculated from the bottom in September 2020.

Should the current support hold, the label “Bear market” will be archived quickly, again.

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Did you buy the dip? If so, whose dip?

Altcoins have rebounded strongly since last week’s lows, with Bitcoin looking much weaker and uncertain about which direction to take. That is consistent with the thesis presented in our recent post. We outlined how Bitcoin could trade sideways for a while, giving the market another opportunity for another mini-Altseason.

The chart compares Bitcoin’s price (above) in parallel with the total market capitalization of cryptocurrencies (excluding Bitcoin ) divided by BTC’s market cap

This indicates quite clearly under and overperformances of the market versus Bitcoin .

Looking at the chart, Altcoins seem to have held quite firmly considering the Bitcoin’s plunge, ending up capitulating only when the market volatility hit extreme levels. After the (local) bottom was in place, traders and investors rushed into buying back the coins that they were forced to fire-sell just a few days earlier. Experienced market participants have been able to buy back at a lower price, others, unfortunately at higher.

This is the typical wealth redistribution in these cases, from those that panic-sell to those who patiently wait to buy dips. Hate it, or love it, that’s the market.

What’s next? Despite the sharp rebound, Altcoins didn’t manage to regain the steep uptrend. They have been trading in for weeks. If this doesn’t happen soon, their momentum could deteriorate. In that case, that could be an opportunity to rotate back into Bitcoin , providing the right amount of fuel to break once and for all the $60,000 resistance.

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Did you hate the market crash this week? Don’t blame Elon, either China or JPMorgan. Let’s talk about managing trade risk.

The market was overheated, and newcomers needed to learn the most important lesson of investing. Nothing comes easy, and there is no free lunch. Those who survived this sharp price drop carefully managed their risk, maybe with a stop loss in place. But the best tip to get by the volatility of the market is to stay focused and stick with your original plan.

Looking at the past for similar patterns may also be helpful. History never repeats but often rhymes. Bitcoin went through the same path last year, between July and September (shown at the bottom of the chart). A long sideways market anticipated a severe price correction that led to another month of price consolidation before picking up again with higher confidence.

Patterns like these show clearly how the demand and supply of an asset redistribute around key levels. As a reminder, once Bitcoin broke above the previous high at $12,000, its price skyrocketed 250% in three months. If the same scenario unfolds, Altcoin may have a further upside for a while before Bitcoin gathers investors’ and traders’ full attention.

Remember to manage the risk carefully until more signs of strength show up. A missed profit is worth more than a realized loss!

The post No Free Lunch appeared first on Coinrule.

Everyone is trying to figure out what will be the peak of the current Bull Market. However, when investing, you need to be forward-looking and think ahead. While the price target for the current market cycle is still very uncertain, it may be easier to foresee what will be the price floor of the next bear market.

Looking at the previous cycles, in both cases, the parabolic uptrend had a brief re-accumulation phase at around half of the way. The price level at which that consolidation happens market years after the same level at which the Bear market followed found its final support.

What if the current sideways price action on Bitcoin anticipates a more significant price drop instead of a new leg up? That is possible, yet unlikely. Usually, parabolic uptrends end up in a much sharper way. On-chain data and the macro environment are still positive, and that could offer a supportive tailwind for months.

Why predicting the bottom of the next Bear market is important? Because knowing that you have the chance to buy below such levels adds significant upside to your investment and will protect your allocation in future drawdowns. Short-term volatility may push prices slightly lower, but dollar-cost averaging Bitcoin may be a very interesting long-term strategy.

The best time to accumulate Bitcoin was years ago. The second-best time may be now.

The post One Step Ahead – The bottom of the next Bear Market may be in appeared first on Coinrule.