DN17 | The Buy Zone

A technical breakdown of the recent liquidation cascade, Elliott Wave updates to map out the direction of the market, and uncovering relative strength in select digital assets.

It’s tough out there this weekend, and I hope everyone is doing okay. In this issue we will look at the recent liquidation cascade on Bitcoin and evaluate where that sits relative to the broader cycle, our overall thesis, and where we think the market is going next. Just like in February, Bitcoin has dropped to 60k again, but this time into a rising 200 week sma. Historically speaking, it is at this level that Bitcoin searches for a bottom, but there are many factors at play.

This issue will primarily be a technical breakdown of the Bitcoin chart, and as part of a more thorough Elliott Wave analysis, we will also revisit this Elliott Wave count that was last updated in April to see how it stacks up against the current backdrop. As always, we will assess both bullish and bearish scenarios, exactly as our methodology dictates. To help map this out, we review a fascinating double bottom fractal to see what time capitulation might look like today.

Elliott Wave Option from DN14

We know the macro setup is fundamentally sound, so with the business cycle and liquidity all pointing in the right direction, at eight months into a downtrend, we will discuss the broader crypto market to pinpoint where the best opportunities might lie. We will explore how the booming AI narrative is creating unique rotation opportunities in the market, and because some digital assets may bottom before Bitcoin, we will focus on the projects demonstrating genuine relative strength.