Uncharted 19: Distilled

11 July 2022

Dear subscribers,

This version of Uncharted: Distilled breakdown of bitcoin’s market structure during last week’s bear market rally. All in the context of a shaky market driven by recession and inflation fears.

Let’s dig in!

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Summary

Uncharted #19 starts by analyzing the run to $21k where bitcoin failed to break through the resistance level. The price action is being compressed between $19-$21k following the low volume recorded in June as the economy begins to show the first innings of a downturn.

• Bitcoin was rejected at the $21k resistance level, however decisive price action shifted support upward to $19k.

• Long-term and short-term holder supply in loss and profit suggested a reviving accumulation and saving behavior.

•  The exchange balance showed an unprecedented flow of bitcoin out of exchanges, reinforcing investors’ reluctance to sell.

• June recorded lower trading volume as investors are back-and-forth between recession and inflation fears.

• Bitcoin’s intraday volatility suggested that investors and the price action are susceptible to incoming data and the Fed’s reaction.

• Peaking retail sales hinted at an economic slowdown as consumer confidence dampened.

• On the other hand, the most recent ISM PMI prints suggested a robust economy able to withstand a subsequent rate hike.

• If bitcoin decouples further from US markets, we likely see strengthening price action, considering the energetic positioning denoted by Swissblock’s Altcoin Cycle Signal and the subsiding risk.

• All eyes turn to the Fed and incoming data.