The Descent
Bitcoin continues to trade in a multi-quarter descending channel
Cheat Sheet -
Support and resistance levels and our daily, weekly and monthly bias on BTC, ETH, OIL, ES, and NQ as well as our favorite altcoins.
BTC Outlook
Finally there is some constructive macro structure on Bitcoin’s weekly chart. The technical pattern that has formed since May 2022 is called a descending channel and for the most part it is a trading range. The pattern is certainly not bullish until it breaks out of the top of the channel.
This current week has been relatively low volatility just at the upper bound of this channel. The next few days will be decisive if Bitcoin can break out of this descent or if it will continue lower into the summer months.
There is one other take away from this chart that might suggest that Bitcoin does in fact break out of this descending channel in the coming days or weeks. That is the 28 week (~200 day) moving average. As you can see in blue in the chart above Bitcoin’s price has not traded above the 28week MA since the first few weeks of 2022.
If the top of this channel does continue to act as resistance and the price starts drifting downward again, the 28 week MA is a good place to expect the first support in the pull back. And, a successful breakout to the upside could see Bitcoin rising all the way to $30k where it broke down in early Q2 2022.
Join us in discord where we will continue to monitor if BTC can find support at this lower time frame moving average.
Possible Course of Action
Remain long if price can move above descending channel resistance
A time stop on your long could be good here
Do nothing and wait for a breakout to long
Short is 28 week MA fails to act as support
The Bulls’ Defense:
Currently trading above 28 week moving average
The Bears’ Prosecution:
Top of Descending Channel acting as resistance
Fed decision could bring markets down
A Closer Look
This section will be focused on taking a closer look on what Hal thinks is important to watch in the coming week.
This morning Hal checks in on ETH and Bitcoin’s relative outperformance in 2023.
Keep reading with a 7-day free trial
Subscribe to Foot Guns to keep reading this post and get 7 days of free access to the full post archives.