10/4 Nice rebound. Can we crash now?

5 Okt

Overview:
The SPY opened Friday significantly higher than Thursday’s close, forming a bullish hammer candle and edging closer to its all-time high. This week closed higher than the previous week, though the previous week did see higher prices.
The QQQ mirrored the S&P’s action, showing similar price movement. BlackRock continues dollar-cost averaging into its ETH ETF, while other major players remain on the sidelines.
One critical trend to monitor: Bitcoin has historically struggled to hit new all-time highs or maintain upward momentum when the Global Liquidity Index is in decline. Unfortunately, the index has been falling for the past 19 days.

You can learn more about Global Liquidity Index and add it to your chart:

The CME Fed Watch Tool has now removed the possibility of a half-percentage point rate cut in November, replacing it with a chance of no rate cut at all. Currently, 2.6% of traders believe there will be no rate cut in November, while 97.4% expect a 1 basis point cut. Even with a rate cut, it will take time for liquidity to flow back into markets. By the time that happens, Bitcoin may hit its bottom for this cycle, signaling the start of a new bullish phase. Be sure to have cash ready for that opportunity.

BTC Technical Analysis:
W: BTC’s price is nearing the Bollinger Band Moving Average (BB MA) at 62.6k. If Sunday’s price rises by $456, it would close at or above that level, offering temporary hope to bulls. However, a more critical level to watch is the previous weekly close at 64.1k.
D : After a significant pullback from the bull trap, daily resistance is set at 63.3k. Breaking that level will require significant momentum.
4h & 1h: No clear signals on these timeframes. In a limbo.

Altcoins Relative to BTC:
APT and TAO have remained stable over the last 5 days, showing no significant declines after BTC’s bull trap. Shorting opportunities might arise soon.

Bull Case: Looking at the past 28 days, we see a clear bullish trend with higher highs and higher lows. As liquidity eventually enters the market, more capital could flow into crypto, pushing prices higher.
Bear Case: On a broader scale, since the start of the year, the market is still showing lower highs and lower lows, suggesting bearish risks are still present.

Fear and Greed Index: 40.78 – Back to neutral.