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Issue 77 – Market Structure Is King

September 22, 2021


Are we in a bull or bear market?

I get asked that question or a variation of it multiple times each day.

So today, I will show you exactly how I’m determining where we are in the cycle. And I think you’ll be surprised at just how simple it can be.

I’ll also provide updates on BTC, ETH, DOT, and VET.

Let’s start!


Bull or Bear Market?

I mentioned something on Twitter today that I want to hit home.

I get questions daily about whether we’re in a bull or bear market. Naturally, everyone wants to know if they should be buying dips or perhaps locking in some profit.

Before I go any further, know that nothing on this site should be taken as financial advice. It’s all simply my opinion, like it or not.

That said, the answer to the question above hinges on the market structure.

What do I mean by market structure?

Put simply, it’s the highs and lows you see when looking at a higher time frame like the weekly or monthly charts.

When I look at the BTCUSD higher time frames, I can see a recent lower high at $53,000. It’s lower relative to the $65,000 high from April.

BTCUSD (weekly time frame)

Although not a great look overall, a single (macro) lower high doesn’t constitute a bear market.

This is where the $37,000 – $40,000 area comes in, and why I think it’s so significant.

In order for BTCUSDT to remain bullish from a macro lens, the market needs to hold above $30,000 to give us a higher low.

However, even a weekly close back inside of this range ($29,000 – $39,000) would be considered bearish, in my opinion.

That’s because $39,000 is the 50% retracement of the July to September advance. So if BTCUSDT starts to close below that $39,000 area, it would signal an overall weakness.

Remember, the key here is the highs and lows on the higher time frames.

So far, the market has carved a lower high. But it can save itself from a bear market as long as we see a higher low develop and a surge above key levels like $47,100 and especially $53,000.

I like to keep things simple, and this is as simple as it gets.

Bottom line: A break above $53,000 likely signals a continuation of the bull market, while a weekly close below the $39,000 region likely means we’re halfway through a bear market.

Bitcoin (BTCUSDT)

Bitcoin rallied today right into the $44,000 resistance area. I’ve discussed this level at length over the last week.

As long as the market is below $44,400, I have to remain relatively bearish. Only a daily close above that level would flip my bias, at least in the short term.

Key support for BTCUSDT comes in between $37,000 and $40,000.

As of now, the market is range-bound, and we should expect that to continue until it breaks one of the two areas I just mentioned. I discussed this range yesterday on Twitter.

BTCUSDT (daily time frame)

Ethereum (ETHUSDT)

ETH is signaling today that perhaps $2,900 isn’t as significant as I thought. Unless, of course, we get a daily close below that area.

I say this because Tuesday closed the day well below $2,900. As such, we’d expect it to serve as resistance.

The flip side to that argument is that $2,900 is, in fact, significant. But the buying pressure on Wednesday was aggressive enough to force a break.

In which case, $2,900 should flip to support.

All that said, ETHUSDT has a huge hurdle to cross near $3,200. We don’t know yet whether the market will retest that area but expect heavy selling pressure there if it does.

As I mentioned yesterday, the $2,500 region will be a must hold support level as it’s the March 2020 trend line that has supported the entire bull market.

ETHUSDT (daily time frame)

Polkadot (DOTUSDT)

DOT is testing its monthly open today at $31.34. In fact, the market is trading just above that level as of now.

We’ll see where today closes as it could be key for the rest of the week. A daily close above $31.34 could flip the level to support.

However, keep in mind that DOTUSDT would have a lot of critical resistance to get through to continue its rally.

First and foremost, the $33 area is a crucial price action level and Fib confluence. Second, the early September high at $35 could pose some problems.

As for support levels, keep an eye on the $26 area, $23, and $17.

DOTUSDT (daily time frame)

VeChain (VETUSDT)

VET bounced today from the long-term ascending channel that has outlined the entire bull market. That level comes in just below $0.09. I mentioned it yesterday.

At the same time, VETUSDT needs to get above $0.098 on a daily closing basis to flip that level to support. Until then, it’s resistance.

Additionally, a close above that level would have to deal with the April trend line near $0.11. That’s the level that triggered the recent false break.

Like most markets, VETUSDT is at a crossroads right now. The March 2020 trend line is a must hold support, yet buyers have several key resistance levels to chew through for the market to turn constructive again.

VETUSDT (daily time frame)

Recommended Platforms

Disclosure: The links below are affiliate links. Meaning, at no additional cost to you, I will earn a commission if you click through and sign up.

Bybit

This is where I do most of my crypto trading. Bybit has the best platform out there, in my opinion, and is constantly adding new features and assets to trade. (You’ll need to use a VPN if they aren’t available in your country)

Trading Tools & Resources

The links below are affiliate links. Meaning that at no additional cost to you, I will earn a commission if you click through and sign up.

Bybit - My preferred exchange for trading crypto. Over 100 tradable assets, super competitive spreads, and the best mobile trading platform I've ever used. Use the link below to get FREE lifetime access to Cryptocademy!

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Justin T Bennett

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About the Author

I'm Justin Bennett, a currency trader turned crypto enthusiast.

My journey started with stocks in 2002. After limited success, I transitioned to currencies in 2007, which later became a full time trading gig.

The journey continued, and in 2020, I committed to learning about cryptocurrencies. It was love at first sight.

Cryptocademy.com is the culmination of my love for cryptocurrencies, my passion for financial markets, and desire to learn and teach.

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  1. Justin, in the case BTC retest the lower channels again, probably ETH retests 2700$ but that would probably mean VET goes below 0.08 since the whole market is connected.

    On a recover from BTC&ETH the market structure wouldn´t be compromised but VET would. Couldn´t it be considered a false break and a future resume to VET channel ?

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