11/17 - Macro for Humans

Market Overview

Headline

Bitcoin Bears Roar as Global Markets Wobble: Navigating the Crypto Crossroads

Summary

Bitcoin's sharp decline is stealing the spotlight as traditional markets consolidate. The US dollar and Treasury yields are holding steady, creating a complex backdrop for crypto traders seeking direction.

Mood

Cautious and uncertain, like walking on eggshells in a china shop. There's a sense that any sudden move could trigger a larger reaction.

What Changed Recently

Bitcoin's bearish momentum has accelerated, breaking below key support levels and potentially signaling a shift in the broader crypto market structure.

Comparative Market Analysis

Vs 7 Days Ago

Stocks

The S&P 500 has cooled off slightly but remains in bullish territory. This relative stability in stocks isn't providing the usual support for crypto, suggesting internal crypto factors are driving the current selloff.

Dollar

The US dollar has been treading water, neither helping nor hurting crypto directly. However, this stability might be encouraging some investors to seek safety in cash rather than volatile crypto assets.

Interest Rates

Treasury yields have dipped slightly, which would typically boost risk assets like crypto. The fact that Bitcoin is falling despite this tailwind is a red flag for short-term sentiment.

Bitcoin Dominance

Bitcoin dominance has remained relatively flat, indicating that the current selloff is affecting the broader crypto market rather than just Bitcoin or altcoins specifically.

Vs 14 Days Ago

Stocks

Two weeks ago, stocks were in a similar consolidation pattern. The lack of clear direction in equities has left crypto without a strong external catalyst, amplifying internal market dynamics.

Dollar

The dollar has been range-bound for the past two weeks, creating a neutral forex environment. This stability has allowed crypto-specific factors to take center stage in driving price action.

Interest Rates

Interest rates have trended slightly lower over two weeks, which should be supportive for crypto in theory. The disconnect between falling yields and crypto prices suggests deeper market concerns.

Bitcoin Dominance

Bitcoin dominance has decreased marginally over two weeks, hinting at a subtle shift towards altcoins. However, with the overall market bearish, this isn't translating to altcoin strength yet.

Crypto Specific Trends

Current State

Bitcoin Vs Alts

Money appears to be flowing out of both Bitcoin and altcoins, with sellers dominating across the board. There's no clear rotation happening – it looks more like a broad risk-off move within crypto.

Hot Sectors

Defensive plays like stablecoins and low-volatility assets are seeing increased interest as traders seek to preserve capital in the current downturn.

Volume And Activity

Trading volume is spiking on downward moves, suggesting strong conviction among sellers. This could indicate capitulation, but also raises the risk of further downside if new buyers don't step in soon.

Key Shifts

Week Over Week

The most significant change is the acceleration of Bitcoin's downtrend, breaking below key support levels that had held for weeks. This has shifted the short-term bias from neutral to bearish.

Two Week Trend

Over the past two weeks, we've seen a clear transition from consolidation to distribution, with sellers gaining the upper hand and bullish rallies facing stronger resistance.

Notable Reversals

The failure of Bitcoin to hold support around $100,000 marks a significant sentiment shift, potentially ending the multi-month bullish trend that had been in place.

What This Means For Traders

If Youre Bullish

• Look for oversold bounces on shorter timeframes, but be cautious about holding long positions overnight
• Wait for a clear higher low and higher high pattern to form before considering longer-term longs
• Use smaller position sizes and tighter stop-losses to account for increased volatility and downside risk

If Youre Bearish

• Consider short entries on rallies that fail to reclaim key moving averages, especially the 20 EMA
• Watch for volume spikes and capitulation candles that could signal a potential bottom
• Be prepared for sharp short-covering rallies, and consider taking partial profits on significant drops

If Youre Uncertain

• Focus on range-trading strategies between established support and resistance levels
• Pay close attention to the $94,000 and $90,000 levels on Bitcoin as key areas that could determine the next major move
• Look for a clear break above the 20 EMA and reclaiming of the $100,000 level as signs the downtrend might be ending

Evolving Trading Guidance

What Changed

From 7d Ago

A week ago, consolidation patterns suggested possible breakouts in either direction. Now, the bias has shifted bearish, favoring shorts and making long entries riskier.

From 14d Ago

Two weeks ago, the trend was still tentatively bullish. The market has now flipped, requiring a much more cautious approach to long positions and a greater emphasis on capital preservation.

Current Best Opportunities

Short-term traders might find opportunities in quick counter-trend bounces, while longer-term traders should focus on building positions at key support levels if they form.

Approaches To Avoid

Avoid trying to catch the bottom with large positions. The old saying 'don't catch a falling knife' is particularly relevant in the current market.

Timing Considerations

Shorter timeframes (1h to 4h charts) may offer the best risk/reward for trades in this volatile environment. Be prepared for quick moves and consider reducing your typical holding times.

Key Levels To Watch

Critical Thresholds

The $90,000 level on Bitcoin is crucial. A strong bounce here could signal a potential double bottom, while a clear break below could accelerate selling.

Recent Breakouts

Bitcoin breaking below $100,000 and then $94,000 has significantly altered the technical picture, turning previous support into new resistance.

Approaching Tests

Watch for a potential test of the 200-day moving average, currently around $85,000, which could provide strong psychological and technical support.

Final Advice

Main Takeaway

Prioritize capital preservation and wait for clear signs of a trend reversal before making large directional bets.

Biggest Change

The breakdown below key support levels has shifted the market structure from consolidation to a clear downtrend, requiring an adjustment in trading strategies.

Risk Reminder

In fast-moving bear markets, even 'sure thing' trades can reverse quickly. Always use stop-losses and avoid risking more than you can afford to lose on any single trade.