Crypto Market Update June 25, 2024

June 25, 2024
@Justin Wise
Lead Technical Analyst, Co-Founder

Interesting things today! Market is bouncing, following yesterday's doomsday candle.

Bitcoin has reached the 1D 200 Simple Moving Average, a strong dynamic level of support that we have not tested yet this bull run. In my experience, strong selling volume into an area of support results in a bounce and temporary reversal of price.

Bitcoin 1D Chart

Bitcoin is still in a Range Regime, we are not in a strong medium-term Bullish of Bearish Trend. We are within a Long-Term Bullish Trend, evidence by the upward slope of the 1D 200 SMA.

Therefore, we still favor long positions, however we temper those expectations with the current Market Regime, which is that of a Range. In a range, I favor my Mean Reversion strategy - as stated earlier this requires bidding the bottom range of the High-Volume Node and selling the top range.

Bitcoin 2D Chart

We have entered the Low Range, and yesterday's candle wicked beneath into the Low-Volume Node territory, clearing out a plethora of long liquidations and filling innumerable Large Limit Orders on the bid side of the Order Book.

Yesterday's Sell Volume was most likely a temporary selling climax. Therefore, a conservative estimate of a reversion to the range's mean of $65,000 is my current projection. Of course, there is a medium-high probability that we continue higher, potentially sweeping short liquidity and filling Large Limit Asks above $70k. That certainly seems to be the narrative that some traders are pushing: "We sweep the ATH to $74k and then dump to $50k."

While that is possible, I'm not a big fan of such narratives. The reality is, that's an easy thing to say when we're down here at $60k, but 99% of those traders, if and when we do get to $74k, will completely flip their script and call for a bullish breakout. Then, if price DOES reverse, they'll continue to "buy the dip" and call to "buy the pullback" until price gets back down to $60k again and then they'll finally turn bearish. Haha, seen it time and time again.

To avoid looking like this (idiot in the previous paragraph), focus less on PREDICTING big unpredictable moves of the market and focus on just taking good trades. Realistic profit targets, stop losses that preserve your capital, trading signals with good historical accuracy. Focus on the fundamentals - it doesn't matter if you're wrong or right on every trade, just focus on trading well and the profits will come with consistency.

Liquidation Heatmap

Short liquidations are clustered $62,180 - $62,684. I expect a temporary pullback in price once we sweep those levels.

Long liquidations are clustered $61,286 - $60,782 - that is the cluster that is closest to price and the liquidations of late longers (those entering now). Those will get taken out IF we dip, sometimes when the market reverses it doesn't pullback and you don't get that opportunity. However, more than likely we'll see that long sweep before a move higher - that will be your chance to enter if you're on the sidelines.

The second cluster of Long liquidations is $60,671 - $60,167. I don't really expect those to get taken out, if they do then we're probably wrong about this rally. If price is bullish, we should continue to see buyers step in with strength.

One very positive thing, is that volume is FINALLY increasing on these 1H green candles - a sign that bulls are buying in with more conviction. Something we really hadn't seen over the past few weeks sustain itself. However, it's only one day, let's see the follow-through.

Bitcoin Footprint Chart

The Footprint chart shows a lot of Ask Imbalances (price levels where Market Sells heavily outweighed Market Buys) above us - of course, we have just been in a  strong bearish trend.

In situations like these, those levels will show you where short-term TPs are valid, or where you can expect price to pullback after clearing them. Focus less on the lower-time frames, this is the time for the 4H-2D timeframe analysis.

Stay safe.

PS. Look at USDT Dominance 1D Chart (attached). Rejection candle at the 200 DEMA - means USDT.D is likely stuck in a range as well and will mean revert - just like Bitcoin but in the opposite direction. Happy Days...potentially.

USDT Dominance Chart