Whenever you find a pattern that has held for the last two crypto cycles and is coming into play today, it’s worth paying attention to.
That’s what happened this week as I was reviewing the charts.
Is it a flawless signal?
Of course not. Nothing is. However, it offers additional clues about whether the bull market is over or if this is simply a pause in the uptrend.
In today’s issue, I’ll discuss the pattern in question and why it matters for the entire crypto market. We’ll then wrap things up with a few charts.
Let’s get it!
All Eyes on the 161.8% Fibonacci Extension
I discovered something interesting this week while analyzing the charts.
Every bull market has retested and bounced from the 161.8% Fibonacci Extension (of the bear market) as new support.
And not just come close to it, but bounced from it exactly.
That level was $50 in 2013 and $1,803 in 2017. Both levels were tested as new support and triggered another 2,260% and 1,000%, respectively.
We get this 161.8% extension by dragging the Fibonacci tool from the top of each cycle to the cycle low.
If we do the same for the most recent bear market, we get a 161.8% extension at $30,033.
Interestingly, Bitcoin is testing the $30,000 region as Q2 futures expire this Friday.
Will it save the 2021 bull run just like in 2013 and 2017?
We’ll have to wait and see. However, based on this new information, a Bitcoin close below $30,000 would put the market in uncharted territory.
The same goes for a retest of $20,000, considering Bitcoin has never retested its previous cycle high after closing a month above it.
But none of this means it can’t or won’t happen.
We’re at the mercy of the market. If the “powers that be” want to take the crypto market lower, that’s what will happen.
As such, it’s essential to keep an open mind and consider all opinions and scenarios.
Total Crypto Market Cap (TOTAL)
Yesterday, I talked about how $1.4T was the hurdle for buyers.
Today, we saw the total crypto market cap reach $1.394T before pulling back.
It’s going to take a daily close above the $1.4T handle to flip it to support. That would open the door to the confluence of resistance near $1.6T.
As I’ve mentioned over the last few weeks, the area between $950B and $1T is the must-hold area for bulls. If that fails, $800B would be next.
There’s a massive battle happening at $33,400 today for Bitcoin. I mentioned this area yesterday as one that could turn the market higher.
However, buyers need to secure a daily close at 8 pm EST above $33,400. Without that, the area will continue to serve as resistance.
A close above $33,400 would open up the $40,000 region.
Alternatively, a move below Tuesday’s low would signal weakness, and a daily close below it would likely confirm the next leg lower, possibly to $25,000.
Ethereum bounced nicely from $1,730 on Tuesday. This level was already on our radar as the May low.
The key for ETH bulls is a daily close above $2,100. Until then, it will continue to serve as resistance.
A close above $2,100 would open the door to $2,600 and potentially $2,900.
A close below $1,730 could take ETH down to the $1,400 to $1,500 region.
VET is struggling to climb back above $0.085. It’s a level we’ve discussed at length in recent days.
Like other markets, until VETUSDT can climb back above $0.085 on a daily closing basis (8 pm EST), the crypto will continue to struggle.
A close above that level would open the door to $0.10, which has been a factor in the past.
I still have the $0.04 to $0.05 support area on my radar, and I’m not ready to rule out a retest.
Cardano bounced on Tuesday right where we’d expect at $1.
I’ve mentioned this level in recent days. Since February, it’s been support for ADA and is very near the top of a long-standing ascending channel.
The area around $1.30 is currently serving as resistance. A daily close above would relieve some pressure and open up $1.85.
Keep in mind that the $1 support extends as low as $0.90.
I mentioned this Litecoin triangle on the 16th before it broke down.
As I wrote back then, the measured objective lies near $65. Whether or not we see LTC move that low is yet to be seen.
The market bounced from $105 on Tuesday, so the $100 region appears to be the floor for now.
A close below that area would likely open up the $65 objective.
The $140 region is resistance with a close above that exposing $170.