10/23 5th time BTC rejected from 70k. Bullish?

gestern

Overview:
The SPY saw a healthy pullback of 0.9%, with a long wick touching levels last observed on September 26th. The index trended downward from the start of the trading session but rebounded sharply in the last two hours, doubling the volume seen earlier in the day. This surge formed a hammer candle—a bullish indicator, particularly when accompanied by increased volume.

Existing home sales in the U.S. dropped 1% from the previous month, reaching a seasonally adjusted annual rate of 3.84 million in September 2024, marking the lowest level since October 2010. Today, new home sales and initial jobless claims are expected, with forecasts set at 245k, slightly above the previous reading of 241k. If the numbers come in lower than expected, it would suggest the economy is not cooling sufficiently, potentially extending inflation.

This decline could be attributed to a rise in the 30-year fixed mortgage rate, which jumped 14 basis points to 6.82%, the highest since July 26 and a 71-basis-point increase since the Fed’s last major rate cut.

The likelihood of a rate cut in November has now dropped to 7%, influenced heavily by the Fed's upcoming reports. Given the weakening housing data, a rate cut may still be necessary to support the economy.

The recent market correction has exposed different strategies among ETF managers. BlackRock continues to buy aggressively, maintaining its purchase levels even after a 5% correction, keeping its stance bullish. Fidelity has remained neutral, staying on the sidelines since the peak of the current bull wave. ARK Invest, however, bought heavily at the top but is now selling during the correction, realizing losses. In summary: BlackRock is bullish, Fidelity is neutral, and ARK is bearish.

BTC TA:
W: BTC is slowly forming this week's red candle, but bullish hopes persist.

D: A significant correction unfolded, as the triple divergence likely completed. The day's wick dipped below 65.8k, then bounced off the 0.618 Fibonacci level, calculated from the bullish pump that began on Monday, October 14th. Despite the pullback, BTC showed higher volume and managed to recover. The final daily candle formed a bullish hammer, although the volume wasn't notably higher than the last two bearish days. As previously mentioned, as long as 62.7k holds, the bullish outlook remains intact.

Drawing trendlines for BTC this year shows the current upper boundary is slightly sloped downward—forming the top of what appears to be a bullish flag. It follows a large rally, with a slight pullback and consolidation, setting up for another potential breakout. Last Friday, on the 18th, the trendline was broken, suggesting a bullish confirmation if retested. However, yesterday’s price action pushed BTC below this trendline. Of course, the trendline could be adjusted to fit the bullish narrative, but the key level to watch is 66.5k.

4h: A sharp drop occurred yesterday, but most of it was recovered in the latter half of the day. This dip seems correlated with the S&P 500’s drop. BTC lost the local point of control at 66.8k but regained it. If bearish momentum continues this week without positive news, and if BTC falls below 65.8k, the next critical support is the yearly level of 62.7k. However, this would be the fourth or even fifth time this year that BTC has been rejected from 70k. If that happens again, will there be enough bullish momentum left to hold 62.7k? The candle that bounced off the 0.618 Fibonacci level formed a green hammer with above-average volume—a bullish sign.

1h: The hourly chart shows a V-shaped recovery, an uncommon pattern in market behavior. Beyond that, no additional insights.

Alts Relative to BTC: Interestingly, SOL has been rising while the rest of the market declines. Some attribute this to renewed interest in memecoins. However, popular Solana-based memecoins like WIF, BONK, and MEW are down, with only Popcat showing gains.

Bull Case: BTC faces rejection at 70k, followed by a deep pullback, and the Fed decides not to cut rates in November.

Bear Case: The Fed cuts rates, and BTC rallies.

Fear and Greed Index: The index is at 52, continuing its downward trend this week.

Opportunities: Check APTUSDT for a possible short opportunity. If SUI and TAO already corrected after their big pump, APT still wobbles at the top and recently posted bearish shooting star daily candle with high volume.