Bitcoin Nears $4.2K, Can it Sustain Positive Momentum? | Crypto Markets

We've been seeing a lot of momentum in the crypto market lately. As we discussed, it's alt season at the moment. So bitcoin is going up kind of gradually. Some of the altcoins are outperforming a bit. The key level to watch out for today is 4200, this white dotted line. If we zoom out on the charts though, the 4200 is not extremely significant on a historical perspective. As you can see, during the bull run, it didn't really play much. The key levels here are 3000 on the bottom and 5000 on the top. So this 4200 level only became significant once we bounced. Right. So there's the December lows over there. And then once we bounced it, we tested this 4200. So that's the top of the current range at the moment. This yellow line is the long term bearish trend line. And it does seem like it's actually broken at the moment, which is quite significant. However, it's not really the purest indicator because, you know, some people will draw their bearish trend line like this, in which case we broken it, you know, a month ago, and some people will probably draw it like this, in which case we haven't broken it yet. So if we ignore that, what we really want to look for is this blue line. The blue line is the 200 day moving average. We discussed this in last week's video and the week before that. This is the. This is basically the one that we're looking for right now. The average price of bitcoin over the last 200 days is 4,623. So we still got a bit of a ways to go. Even if we cross 4200 today, that leaves us another $400 to get to the blue line. We. What I'd like to see in order for, you know, something that could really change sentiment is a strong punch above that blue line and then that would basically put a lot of people into a bullish, a bullish stance. So definitely it's still very much alt season at the moment. On this chart, we can see bitcoin versus some of the alts that have been outperforming. Dash has been the winner over the last, over the weekend anyways. It just hit 100% gains since the December lows, whereas bitcoin has only done 30%. Also, we can see here litecoin and eos which have done 166% and 136% respectively. So definitely we're still in the midst of altcoin season, and some of the lower cap cryptos have been even doing better than that. Some of the really low cap cryptos, you know, are up 1,000%, 2,000% in a day. And a lot of the time they kind of take turns surging, you know, as investors shift sentiment. It's very difficult, of course, to pinpoint exactly which one is going to surge next. I mean, dash, overall, it's a solid project. They have gaining acceptance, you know, especially in South America and in other places where crypto is needed most. They do a lot of work on the ground there, but I haven't, but I don't know that there was any specific announcement that really caused it to zoom like that, rather than it, you know, just momentum building slowly during the altcoin season. One of the key technical indicators that a lot of chartists have been looking at lately is the Ichimoku cloud. As you can see, over the last month or so, we've been largely remaining above the cloud on bitcoin. So using most of those indicators that are, that are on the Ichimoku as a support level, which is quite a positive sign indeed. We've seen before that the Fed is influencing the macro economy. And it basically because the central banks of the world, so the Federal Reserve in the United States, the ECB people, People's bank of China, the bank of Japan, et cetera, they're the ones who are largely in control of the money supply. So this basically feeds directly into how much liquidity is around and how much money is available for people to invest. So just since the beginning of the year, the Fed have taken a very supportive stance and they've been kind of lowering their expectations to raise interest rates. And you can see the effect it's had on the Dow Jones. The Dow Jones, even though we've been having a pretty good year for bitcoin, so far, the Dow Jones has more than doubled that. And you can see that overall, the correlations between the stock market and between gold and bitcoin have been rising pretty steadily throughout the year. At the moment, I mean, the correlations are pretty, pretty much insignificant. We're talking about 0.1. You know, when the correlation is 0.1, it really means almost nothing. 1% is a perfect, or, sorry, 1 is a perfect correlation. Negative 1 is a perfect negative correlation. So 0.1 really doesn't mean much. But when you can see that the, that the correlation between gold and bitcoin and the Dow Jones and Bitcoin is rising steadily. And I think that's what we really want to look at is not that the absolute numbers, but the direction overall. The central banks are increasing liquidity into the market. And that means that investors are looking for a place to put that liquidity. And I think that that's a lot what we're seeing in the stock markets and some of the commodities and of course in crypto as well. If we zoom out on this chart again, we have the Dow Jones in purple and, and Bitcoin in blue. We can see that 2017 was actually a fantastic year for both stocks and for cryptos. And that's largely due to the Federal Reserve influence and central banks being very supportive. In 2018, they withdrew a lot of that support. They announced that they're going to be hiking rates and winding down their monetary policy. And you can see that 2018 was extremely volatile, both for Bitcoin and for the stock markets. In 2019, again, they changed their tone and they became more supportive. And you can see that the stock markets actually reacted immediately to that. And that's because stock traders understand a lot better they're trading on the Federal Reserve. So when they see that there's more liquidity in the market, they instantly go out and they instantly go out and buy. However, it has been kind of stalling in the last few weeks in the stock markets, whereas the crypto is just now starting to respond to that.

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