An illiquid market leads to sharp moves. - #TradingOutlook Powered by KTG
We had a very interesting market last week with important macro events and crypto news affecting the sentiment and causing shifts in price behavior.
BTC started last week consolidating quite close to the $25,300 support area after a sell-off the week before - on the back of SEC charges against Binance and Coinbase.
That negative sentiment was dominating for the next few days, as any attempts to push the market up on positive news (like lower CPI on Tue, lower PPI on Wed) were quickly absorbed as selling opportunities.
Crypto was diverging from rallying equities and it was looking heavy coming into the FOMC rate announcement later on Wed.
Fed paused as expected, but there was no relief rally.
Instead, market participants were looking for excuses to send the market lower and that’s what they received, focusing on hawkish dots and Powell.
BTC got sold off, broke $25,300 support and dropped to as low as $24,800 where it started consolidating.
There was an attempt to send the market lower on Thursday.
However, as Wednesday’s low was attacked, instead of the next leg down, there was rejection after swiping liquidity below.
It was the early sign of bulls getting stronger, absorbing the selling pressure and trying to gain control.
Not much later, we had BTC-positive news coming to the market about BlackRock being close to filing its application for spot BTC ETF and Celsius to start converting alts to BTC and ETH from July 1st.
The news about BlackRock started to make the market hot.
We had aggressive buying on BTC and later in the day, the rumor about BlackRock became a reality as it officially filed for spot BTC ETF, which only added to the buying pressure.
Sentiment was positive, with strong reactions to the upside and any attempts to push the market lower worked as buying opportunities before the next leg up.
Early on Sunday, BTC set a weekly high at $26,900 and traded sideways for the rest of the weekend, closing the week positive.
Buyers have dominated the market since Thursday, which gives a chance for longer positive sentiment change.
Even though last week was positive, we still have lower weekly highs.
Also in recent weeks, we’ve seen a lot of choppiness and changes in market sentiment so it’s important to stay cautious, not get too optimistic and watch out for further signs from the market on where it wants to go next.
To be more confident about the long side in higher time-frames, it’s important to break $27,500 and stay above that level, which should open the way for retest of 2023’s high at $31,070 with some challenges on the way at $28,000, $28,500, $29,200 and $30,100.
When it comes to a lower time-frame, what we want to see is more of what we had on Thursday, Friday and Saturday, where buyers suddenly and strongly stepped into the market after consolidation or retracement and pushed it up, leading to accelerated up-moves.
From the downside, worth watching $26,100, $25,800, $25,500, $25,200 before key support (and last week low) at $24,800 and then $24,000.
Please bear in mind that it’s still a very illiquid market where it’s not that difficult to push it either way so sharp moves can be expected.
How they are unfolding – the strength of those moves and if or how buying or selling pressure is being absorbed will be key to get a sense of who is in control and where the path of least resistance is.
As always, have a great trading week ahead!
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