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Hi Rubikators! A week that passed and another that begins. The real story of that is that the cryptocurrency market presented a very intense week with the output of approximately 10% of the total market capitalization. To date, it records a historical low around $195.51 billion.
The last 24-hour volume negotiated when this article was written was approximately $123,2 million, and the Bitcoin Dominance every day is going up, more about 68% is recorded and 32% is made up of the rest of the cryptocurrencies.
Then our previous conspiracy theory was fulfilled as we had anticipated. With this we continue to learn that the market is for the big players and we also recognize the evolution from the years of the last Bull Run until today.
Honestly, the cryptocurrency market has changed a lot and one of the things we learned from this price drop was that investors, whether human or non-human, sought within the market an asset to protect themselves from massive price drops.
Doing an observational investigation, we note that in that fall, the majority of investors in addition to using the stable coins, it seems that many of the robots in the market saw a protection currency with KAVA ($1.16 USD). It is like the relationship in traditional markets, as today, there is a strong fight to protect the patrimonial capital in gold or dollars when emerging markets fall.
With that we come to an important first conclusion: the markets have their cycles and now we are in new market click. That is being seen not only in the cryptocurrency market but also in traditional markets.
But before continuing with the explanations, we have to confess you that we are Benoit Mandelbrot’s fanatics theory, one of the best theories to explain repetitive market cycles.
In simple words, applying this theory we can understand that markets are chaotic, cyclical and repetitive, and that in the midst of that chaos we can find the natural order of things. And it is exactly the order we want to talk about in the following lines.
So, starting from traditional markets and taking as a reference in the first instance the correlation between the dollar index (DXY) and Gold, we can instantiate exactly what we are talking about above.
If we look as well, between 2017 and 2018 there was a fall in prices, then followed by a new historical high and currently that trend is repeating and a new cycle of re-accumulation is beginning.
By correlating previous assets with Bitcoin, we can observe three things:
(1) exactly where people are concentrating the highest percentage of capital to protect themselves from the emerging crisis that is currently starting in terms of economic resection;
(2) Gold continues to be the most valuable asset of protection and whoever follows it is Bitcoin, not as a store of value, but as a high potential technology to improve the world economy. On the contrary, the dollar only continues to perform world inflation with a tendency to deteriorate over time.
and (3) many of the new investors are concentrating on asset prices and not on the valuation cycle where the big players are really looking at each other.
On the other hand, a fourth (4) important thing is that in this new cycle and with the last high of the dollar in most countries, the world economy is in a constant oscillation (taking as a reference the correlation between USD/EUR /BRL) that is intensifying in an inflation that is almost in the clouds and without counting the world debt of which we had already mentioned in a previous report.
From that then we learn that world inflation is growing, investors every day are looking for a better asset to protect their equity capital and what really matters for the big players of any market are not prices and if market cycles. From the latter, it is clear that we are in a phase of re-accumulation.
In another conspiracy theory we had talked about the main actors that entered the market and that during the next months and years they will be trying to make a checkmate for periods.
When this article was written, Bitcoin was being traded around $7020 and $7250, with a small reversal on the hourly chart. The parabolic movement of fall is now more evident. We keep watching. 👀
🙇🏻♂️ Remember that to open a long in Bitmex in this area we must wait for the MACD cross in the daily chart and a trend reversal. Contrary to that we are still in a strong risk zone. 👇🏻 continue reading 👇🏻.
The closing of the Sunday market was unexpected with a lethal death of many bulls. It took many hours for the battle to reach a point of conversion. That conversion point closed with the crossing of the price of Bitcoin in the EMA900 very close to $6550, which triggered the alarms of many robots in the market.
At that same point the market began to recover quickly and now we are fighting for the breakdown of the EMA700 very close to $7200 and $7050.
Negative points for the following days: (a) crossing of the EMA9 and EMA500 at the indicated point of $7550 with a probability of downward trend, indicating strong selling pressure; (b) strong resistance marked by the crossing of the EMA300 and EMA21 at the point near $8080 and $8150, also indicating selling pressure with high strength; (c) crossing of the EMA200, which as we said before indicates the death cross pattern, in the area of $8650 and $8450; (d) The EMA100 for now behaves as a very strong area of resistance confirmed by the small formation of the Ichimoku cloud cluster, which shows us a downtrend.
Positive points: and (e) RSI with 32 points showing signs of trend reversal and MACD a few days after crossing the means.
After the massive sale of future contracts by the CME and betting on the price drop, Bitcoin is expected to make a move in M or double top. But, after the last fall we can notice something different: the last movement was not rectilinear, it was characterized by a formation of a curvature and if the price does not break our downward trend line within our symmetrical triangle, the tendency is to return to the it plays very close to $9050 to test the breaking of our downward trend line at an equitable point at the price we have mentioned but making another curvilinear movement.
It seems that Elliott’s theory is again failing at some points. Therefore we will continue investigating.
Now the zone of re-accumulation is more evident. But we are already announcing that in the next expiration of the future contracts in December of the CME the price could have the same movement of the last extreme fall that surprised everyone. An approximate price for that is very close to $5020.
That is why it is very important that you understand our latest conspiracy theory that we have written.
Bitcoin last week broke the EMA50 in support of the $8050 and $7950. The beginning of the price drop began when the EMA21 crossed with the EMA9 towards the direction of fall between $9050 and $8950.
In the coming weeks we will have a great challenge of the crossing of the EMA21 with the EMA50, which could be translated mostly a new price correction in the opposite direction to the high trend if the price does not break the EMA50 around $8220 and $7850.
For now Bitcoin remains supported by the EMA100 around $6950 and $7250.
Next weeks we will be able to see the price by testing near to our downward trend line within the symmetrical triangle drawn if the buying force becomes greater than the selling force. Otherwise we would be testing the EMA200 around $5550 and breaking our high trend line in our symmetrical triangle.
On the side of the indicators we still have the MACD showing price correction and RSI aiming 42 points, which can attract the curious bulls of the market. The cluster of the Ichimoku cloud in the weekly chart is still very strong on the bulls side.
Note: Bitcoin makes a correction at the exact point that the Ichimoku cloud had marked and that we had particularly said in one of our previous market reports. That is why we forget the past and focus on the future.
See the next story. With Love 💛, Rubikators Team.