It’s been a crazy couple of days for crypto; horrible might not even be the right word for it. We won’t spend much time in this Technically Speaking article, but the two big dogs, Bitcoin ($BTC.X) and Ethereum ($ETH.X) are at critical breakout points to the downside.
And it’s not just Bitcoin and Ethereum, but the broader market as a whole. Despite some altcoins outperforming BTC and ETH, their individual technical levels all scream pretty much the same warnings that we’ll see on BTC’s and ETH’s charts.
I don’t think this chart needs a whole lot of introduction. It’s FTX’s token, $FTT.X.
What else do you need to know? Tuesday’s blood bath put FTT from an open of $22.21 to a dismal close of $5.43, a -75.44% drop. Yesterday’s only bright side was the recovery from its $2.73 low.
And today didn’t get any better, just worse. At the time of writing, FTT fell below $2 to an intraday low of $1.74, that’s a -68% loss. From yesterday’s open to today’s low, it’s a mind-boggling-92% collapse.
Many traders would say this pattern is very “LUNA-esque.”
The first image you’ll see below is from the October 10, 2022 issue of the Litepaper.
Long story short, traders at the time were concerned about the existing triangle pattern and how it resembled the same structure found in some of Bitcoin’s biggest sell-offs.
The article discussed the common behaviors analysts see with triangle patterns, one of them being a breakout followed by a failed retest. Many believe that’s what’s happening now.
So what does this potentially mean for Bitcoin ($BTC.X)? If history repeats itself, traders suggest we could see a substantial drop toward the $11k value area.
The chart above is Bitcoin’s weekly chart – that is one heck of an ugly red candlestick on the weekly chart. Unless you’re a bear, then you’re pretty happy. But look at the Volume Profile.
There’s a massive gap between $17,800 and the next high-volume node at $11,600. Traders often suggest that large gaps between high-volume nodes often act like vacuums where price action gets sucked through it to the next high-volume node.
Ethereum’s ($ETH.X) monthly chart looks very dangerous to many traders. It’s on the edge, like mid-way through Collective Soul’s The World I Know music video, when the distraught man is ready to jump.
This music video needs to hurry the eff up to the part where Ethereum has a pigeon land on its arm and take out a bagel to feed it and realize it’s got something to live for. 📈
For now, though, these charts give market participants little to be positive about. As always, we’ll monitor the charts our community is watching and any insights they share in our next issue.