Bitcoin spent the weekend grinding slowly towards $10,000, further erasing short-term hopes of a push towards all time highs. The $13,900 figure that was reached last Wednesday looks more and more likely to have been the short term top, as on a technical level everything is pointing to at least a week of downtime, with alt performance dependent upon the severity of Bitcoin’s movements.
Bearish Indicators
A number of indicators are suggesting a turn towards a more bearish scenario, among them the MACD, which crossed bullish two weeks ago in advance of the run from $8,000 to $14,000 but is currently within 24-hours of crossing bearish. The weekly closed at $10,750, showing a clear flattening out of price action following a 240% run up in the past three months, with the last three weeklies closing within $100 of this level, showing that Bitcoin is currently unable to push and hold much past this price.
The fact that June ended with a monthly gravestone doji is another indicator that more downside is on the cards before we can think of an assault on the all-time high.
Alts Looking Good Against BTC
Alts had something of a hot minute over the weekend compared to BTC prices, with the Binance IEO tokens as well as HOT and LINK performing the best, although when compared to USD the gains were minimal. This fuels the suggestion (or desperation, whichever way you care to read crypto Twitter) that the much vaunted ‘alt season’ is on the way, amid suggestions that alts have finally hit their bottom.
Many have still succumbed to further losses in their USD pairings however, which means that care should be taken before any alt positions are entered – if you value BTC more than USD then many alts are indeed in a good position now, with BTC looking like it’s going to make further downward moves and the money gained from its recent move having to go somewhere. However, if you value USD, then most alts are likely to follow BTC down and should be largely avoided, or shorted. One of the reasons for a delayed alt season came from someone on Twitter who suggested that the Bitmex Insurance Fund, where liquidations go to die, had something to do with it:
wHY AltS nO pUmp SiR !?!?!
Exhibit A: the bitmex insurance fund in $USD
Chart stolen from @loomdart pic.twitter.com/GIAKZEdZkd
— Godson [Crypto] (@Mansa_Godson) June 30, 2019
The fund now has close to $400 million of liquidated cash, money which might otherwise have been moved into alts, or even to help prop Bitcoin up. The locking up of this much money, coupled with Bitcoin’s fragility and the fact that many alts are zombie projects that no one has yet realized will never pump again, suggests that, unless Bitcoin is able to move sideways for a while, alt season will be further postponed.
