It was a boring week with no major macro and news affecting crypto.
It resulted in a very small weekly volume and price range not seen for more than half a year.
The last time we saw this, it was on the verge of '22 and '23 when BTC was building a base close to the '22 low before a strong up-move in Jan.
A directional move seems to be brewing again.
BTC started last week slow - early on Monday with a directional move in the US session which was later reversed – quite similar to what we had on recent Mondays, just the opposite direction - to the downside this time.
News about global banks in Hong Kong being reluctant to service crypto and SEC Gensler being disappointed with the court ruling that XRP is not a security might have contributed to that.
The market was pressed down not only on Monday, but also on Tuesday with sellers coming to the market gradually lower.
At the same time however, any bigger moves down towards $29,500 support were being aggressively bought, resulting in swift bounces.
It looked like big player(s) needed to sell quite a lot, but wanted to do it in a controlled way without pushing the market down too much - it might have been the US gov or miners as we had quite big moves on their wallets last week.
Wednesday gave us a small bounce just before UK CPI data release.
Even though it came out lower than expected (and lowest in over a year), supporting the global disinflation theme, the market didn’t want to go up but was rather heavy.
Asian session on Thursday gave BTC another move up, but again it was short-lived and after swiping liquidity above its weekly high from Monday, it rotated to the downside.
Not much later in the US session, it got sold-off quite swiftly driven by the news about FedNow being live now.
Nonetheless, $29,500 got defended again.
Friday and Saturday were quiet with sideways trading. Late on Sunday, we had another pump towards weekly high, which again sold off just before the current week start and open on forex and traditional futures markets.
Eventually, BTC finished almost unchanged last week for the fourth consecutive time.
There are no major adjustments to our game plan as we still keep on trading in the range ($29,500 - $31,850) for more than a month now.
It was an even tighter channel last week as BTC was staying in the bottom half of that range.
$30,500, which is roughly a midrange, was limiting any bounces and it is kind of a pivot point.
If broken and reclaimed from above, BTC can target a range high and ’23 top at $31,850 but as long as we are below, downside is more likely with $29,500 in danger of being broken.
So for now even though we stay and trade within the range, our bias is increasingly skewed to the downside.
As mentioned a week ago, we were more and more concerned about the upside as even though bullish news were coming out, the market didn’t want to go decisively up, but buying was absorbed instead, giving signs of distribution.
Price action last week was further supporting that, and it looks like slowly but surely bears are becoming stronger.
If you are a big seller, you want to have your average selling price as high as possible and for that purpose, if possible, you try to use less liquid market conditions to squeeze weak leveraged shorts to have better liquidity and price to sell.
That’s what we think happened last week, with short squeezes in Asian and European sessions to sell in US sessions.
This market behavior shows that it’s better not to FOMO in as it’s easy to be chopped out even though your bias may prove to be right later, but rather use squeezes and resulting liquidity to trade against in the range.
Timing is important, hence it’s worth watching price action.
If we finally manage to have a sustainable break of $29,500 or $31,850 with daily close below or above respectively, next levels to watch remain the same as indicated in previous reports.
Hopefully it will happen this week, with many events having the potential to be catalysts.
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