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Weekly Market Report (16.08.21)

Current situation.

The Crypto market is led by bitcoin and for us to appreciate this market as a whole, we will consider bitcoin as the reference for the general analysis to understand where this market is heading from a technical perspective.

Since inception, bitcoin reached 17,798.68 high on 17/12/2017 in a five waves structure that was calling for a continuation higher after correction. This correction from the 17/12/2017 high took one year to complete down to 3,156.26 low to start a new cycle higher. The first leg of this cycle brought bitcoin to 13,970.00 high on 26/06/2019 in a three waves pattern that bulls could not convert into a bullish structure and from there we saw a deep correction to 3,782.13 low on 09/03/2020 (that we consider as an aberration event following covid-19 breakout as we initially called for the end of the correction on 18/12/2019 low at 6,435.00. By that time, we were waiting for signals to resume swing trades that did not come until early April in our system).

A major cycle has ended, truncated, at 64,854.00 all-time high dated 14/04/2021 from March 2020 low at 3,782.13. From the top, we propose either a diagonal that ended on 22/06/2021 at 28,805.00 either a double correction that ended at 30,000.00 on 19/05/2021. Either way, we are calling for a continuation lower in the weekly view to as low as 19,000 (log scale projection) or at least 24,075.00 in the current cycle from 15/06/2021 high at 41,3330.00.

We are calling a cycle from ATH completed at 28,278.00 low from 20/07/2021 as a triangle. From there, we have an acceleration and we should see at least a three waves structure to the upside in daily to possibly 46,700ish or to new highs in weekly. We will need more data to assess the developing structure but we had a buy long signal on the daily this weekend.

What to expect this week.

Bitcoin saw a new high last week above 41,330.00 which confirmed the end of the cycle mentioned above and more importantly the cycle from 28,805.00 reached beyond the 161.8% extension of the first cycle from 28,805.00 to 36,428.00. The sharp rejection seen on Sunday could signify 3 options equally credible.

Loss of sentiment last week could be seen as a 4th wave in the making that would last this week and then a marginal new high with divergence in momentum would be interpreted as a bullish structure. And while we would still need to see a correction of the all cycle, that would be very bullish in mid-term.

On the contrary, bitcoin could simply be met by the sellers who would not be done with a larger move. This is not our primary view and we would only know at later stage if the market is choosing this option.

Based on Eth, we propose the current correction is the first leg of the cycle from 29,278.00 as a bullish structure and we would like to see buyers around 39,000ish to continue pushing the price higher from there for a new high this week.

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