Commodity Blow-Off Top? Bullish Momentum Signal Triggered | Market Update
Report Date: March 24th, 2022
Bill Noble, Senior Market Analyst, Token Metrics
The Market Update is centered around using technical analysis to successfully and responsibly navigate the crypto market. It is not intended to be a trading calls newsletter. While technical analysis is an extremely powerful tool, please be aware that it can be temporarily disrupted by large news events.
Total Crypto Market Cap + Token Metrics Custom Momentum Signals
Data as of 3/23/2022 – Past performance not indicative of future returns
Looking at total cryptocurrency market cap (TOTAL) along with a custom indicator that uses AI-based grades for 6,000 digital assets has flipped to bullish. This is a custom indicator created by the Token Metrics quant group. This signal is intriguing because the last signal was a “sell” just after the market topped in November. This new bullish signal could suggest it is time to find chart points and use them to buy dips.
Bitcoin – 4-hour Chart
Source: Symbolik
Data as of 03/24/2022 – Past performance not indicative of future returns
Looking at the 4-hour chart, Bitcoin made a clean bounce off a DeMark support point at 42,007. If that level continues to act as support, BTC may be able to extend the rally to
$44,000 or $47,000.
Ethereum 4-Hour Chart
Source: Symbolk
Data as of 03/24/2022 – Past performance not indicative of future returns
Ethereum may be starting a new uptrend. If ETH ignores DeMark topping signals on the 4-hour chart, that would be one positive sign. If ETH moves above and then spends time above a resistance point at $3,053, that would be a more convincing indicator that a new up trend has begun.
Bitcoin – Weekly Chart
Data as of 03/24/2022 – Past performance not indicative of future returns
On the Bitcoin weekly chart, BTC is turning higher after nine painful weeks of consolidation. Sometimes, great pain can lead to great opportunities. If the crypto market is perceived as a hedge against inflation, then BTC could surprise people on the upside.
Legacy Chart of the Week – CRB CRB: Daily Chart
Data as of 03/24/2022 – Past performance not indicative of future returns
Did you know that Bitcoin futures are categorized as a commodity? BTC futures are regulated by the CFTC along with other commodity futures contracts. It is interesting to note that a commodity market index, the CRB, has been following an “ancient” trading pattern (bottom right) developed by Jesse Livermore. He is a trader from the early 20th century featured in the book, Reminiscences of a Stock Operator. This chart structure shows a blowoff top could be coming in commodities.
Point: If commodities go parabolic one last time how can digital commodities like BTC not participate in that rally? Think about it.
Key takeaways:
- Demand for crypto assets seems to be returning. Investors may be waking up to the fact that BTC and ETH will be a part of the new monetary order.
- Buying strength has not worked for nine weeks. If the crypto is going to switch from range-mode to trend-mode, we should see signs of that in the next two weeks.
