Processing the latest moves
Weekend Update
In the last Compass, we marked the zone of the Daily 200 EMA at $58.4K, a long-term bullish trend, as the area to consider to be filled before considering a possible rebound. Nevertheless, due to the higher-than-expected selling pressure unleashed by the Mt. Gox wallet movements, Bitcoin plunged to $54K, creating the fifth largest short-term holders sell-off since the FTX collapse.
Right now, we’re observing how the Bitcoin price recovered to $56.5K, and is trying to penetrate the edge of the bottom of the three-month range. One ugly scenario is if Bitcoin tries and fails to break the bottom of this range around $57K and starts ranging and weakening; in that case, the least we can expect is to revisit the $54K zone or go lower.
The market sentiment question here is whether this is just a consolidation or a real trend change to a bearish stance. The FUD we have been experiencing since the last week of June, the liquidation of leveraged positions, the shift to fear zones in the Crypto Fear & Greed Index, and the miner capitulation make us think it’s the former: a part of a consolidation scenario.
Of course, we’re not ignoring the effect of the selling pressure after the awakening of whales and the repayments from Mt. Gox. Certainly, investors didn't digest the news of Mt. Gox finally moving assets from cold wallets well. Nevertheless, we can’t ignore the opportunity this price zone and any dips lower represent to spot buyers: Overall we still expect a high upside in this cycle, with $100K being our target for 2025 since 2020.
For the short term: Consider that in this news landscape bears may be getting overconfident in their positions, which could make them the next target for liquidations - in which case prices would spike upward if the next move down doesn’t happen fast enough, just like the next move up didn’t materialize this week.
