Crypto’s Labor Day Special

Bitcoin & Ether Fall

Both major assets broke and closed further down than their support could handle. Bitcoin’s support was $11k and closed below $10.5k, Ether’s support was $400 and closed below $360. In order to stay clear from further correction we need to see a close of above $11k and $400 respectively. If not, we can see prices drop to their next major support level $8.8k and $290. If this does happen then indicators will signal a shift towards a bear market.

Options market continue to be bearish even after the recent correction. Put/Call ratio is showing a bearish view, showing signs of nervousness.

As for traditional markets, we see major profit taking, especially with tech stocks. With warnings from major indicators like the Buffet indicator, we see investors begin to square up their books for a downward market ahead.

Bull Case

Indicators are showing that $8.8k is a major support for bitcoin. There are a great number of whales waiting to buy bitcoin up at that price level. Bitfinex shows that whales tend to bid the lowest support levels to ensure liquidity so a high-$8k price floor is still in play.

Su Zhu, CEO of Three Arrows Capital, is confident that we will no longer be seeing bitcoin at the low-thousands range.

“I am actually flabbergasted by the strength shown at 10k and prob means 100k is more likely than 5k at this stage.”

-Su Zhu

What To Do?

With all markets being near a breaking point, here are a few things that you should consider.

1. Take Profits, Cut Losses: Begin setting your stop-losses and take-profits for a retest of bitcoin’s 10k.
2. Keep Your Eye on Stocks: With the stock market overvalued, it’s important to monitor the market for if it busts it will come and affect the crypto market as well.
3. Take Your Capital and Hibernate: Take your profits/losses and turn them into stable coins. Make them accrue interest while markets stabilize and wait for a significant pull back to re-accumulate on long-term assets. The DeFi space might be out of juice which means the CeFi space would be well positioned to breakout. Providing security and peace of mind will bring investors back to institutions.

*This is my opinion only and should not be taken as financial advice.