Following our December 2nd guidance, we are currently in the panic seller phase, as illustrated in the screenshot below. As in any recessionary cycle, we must first preserve capital as our first priority and then look for significant dislocations to build our long-term positions as our second priority.
We preserve capital first because survival is paramount with any cyclical market. We consider accumulating long-term positions to shore up any short exposure because we also know that emotional markets can present favourable opportunities.
Projects that survive and build during recessionary cycles emerge as the champions of the next market cycle as many of their competitors are wiped out, and traders allocate to the victors.
BTC Technical Analysis
As pointed out in our last market update, BTC was forming lower high after lower high and creating bearish patterns such as head & shoulders etc. This, together with the macroeconomic situation, the looming escalation of the situation around Russia, we saw in the last 24h the bears being the stronger players in the market resulting in a 20% drop on BTC and most other crypto assets.
In the chart, we can see a smaller yellow box. This is the golden pocket of the last move up from 30k to 69k.
The bigger yellow box is the golden pocket of the whole move up from black Thursday (March 2019) to the top.
The smaller blue boxes are local Fibonacci extensions measured on the last bear flag and the bigger blue box is measured from the drop on the weekly timeframe.
The smaller golden pocket did break down earlier, bearish retested, and resulted in the current drop to 35k.
On the daily timeframe, we see several confluences building up around the bigger blue box (bottom major golden pocket, bottom long term channel, and Fibonacci retracement zone/big blue box).
Depending on how macroeconomics develop in the coming weeks and how stock markets will react to this, the bigger blue box has to be seen as a probability for BTC to visit.
We are here to support you in these challenging times and protect your account as our principal priority. As always, we will be sharing additional guidance on the macro conditions and asset-specific opportunities. You can expect additional guidance from us early this week on both charts and our primary listings performance outlook, which is our barometer for the health of retail demand.