2x Opportunity Coming Our Way

Uncharted Lite #4

Key Takeaways

• BTC finally caved. Shorts are in control, and the price is below $27k. Could this be the leg down needed for the ride up to $35k?

• Despite the improving sentiment and the Bitcoin Risk Signal structure, a dip to $25k is still in the books.

• Significant buy walls set at $26k, $25.5k, and $25.3k. Weekend plunge protection is set.

• The mid-term outlook of $35k is still in play. Buying near buy walls is an excellent opportunity, but buying high-beta altcoins could lead to a 2x return once the move begins.

• Shorts have gained control, bitcoin is below $27k, but seller exhaustion could be taking over. The risk of a pronounced drop increased, but we believe that $25k is the hard bottom. The abrupt move down is materializing.

• The Bitcoin Risk Signal has risen since Tuesday, reaching the high-risk area. It can be observed that this rapid increase also happened in March, coinciding with bitcoin's drop and recovery.

• The DXY showed renewed strength this week, breaking over the 102 level. This should continue to pressure BTC as its ties to TradFi are strengthening.

• The DXY could hit anywhere from 104 to 107 considering it crossed over the 102 level since mid-March. However, this month-long structure will eventually break, and both assets will experience price discovery – bitcoin to the upside, and DXY to the downside.

• Open interest has increased substantially (+13%) since shorts got the first taste of the $26k target. The market is overcrowded with short positions, which has led to squeezes in the past and strong bounces. Open interest needs to plummet suggesting satisfied or exhausted shorts, then we can begin to build the ramp up toward $30k.

• Remember that shorts are still in control and the price could drop further toward $25k. We haven’t seen the open interest reset, yet. The sentiment is improving as longs are beginning to come in. This could make the $25k mark the touchpoint before reversing.

• The bottoming is materializing. Our big picture signals suggest that the overall market is oversold: nearly 90% of alts with deep drawdowns from the year-to-date highs and the Bitcoin Risk Signal is looking similar to March, structurally, which led to a strong bounce.

• Weekend protection has been set. Notice the significant buy walls between $26k and $25k.