DN18 | The Tide Is Turning

Why easing macro headwinds and technical bottoming structures suggest the worst is finally behind us.

Good afternoon guys and welcome to another edition of the Decode Newsletter. Last issue we looked at Bitcoin’s rejection and collapse back down to the 60k level, and that’s where price remains today. It’s starting to feel like an age since we first saw 60k back in February, a case of true time-based capitulation in the market. What the market doesn’t give up in price, it instead gives up in time.

Crypto market sentiment has progressed beyond the state of fear that was palpable at the first capitulation to 60k. After a few months of price appreciation and some decent performance across the altcoin sector, the drop back down has left sentiment depressed and more bearish than ever.

There’s not much interest in crypto at all, and as the market hunts for a bottom, only the most seasoned investors remain. Last issue we talked about ‘The Buy Zone’, what the most opportune moment to get into Bitcoin or Crypto might look like. In this newsletter, we will unpack current market sentiment, dig deep into the technicals, and evaluate the broader macro landscape, covering the business cycle, shifting liquidity, and more.

Everyone wants the bottom to be in and I really do think that we are close, but the bounce off the 200-week sma has been weak so far and it’s therefore too early to tell. It’s easy to draw convincing parallels with other bear market bottoms and the late 2022 technical setup. Price finding a lower low on weekly bullish RSI divergence, just as it tests the 200-week sma for the first time, looks incredibly convincing but is it too good to be true?

That’s the question we are aiming to answer today, and as always there is a lot to cover, so let’s get straight into it.