Bitcoin is up $295 today and that's technically a victory but earlier in the day it rose above $50,000 before giving nearly all of it back. It was last trading just above $48,000.
The daily chart isn't promising.
I looked at recent episodes where there have been large drawdowns like we saw last weekend and that's usually followed by further selling and at least a retest of that low. The weekend bottom was just below $42,000.
In terms of support, there are many eyes on the 200-day moving average, which is shown above. That level at $46,500 and the intraweek low of $47,167 are spots where stops could be tripped.
In terms of sentiment, I've been surprised at just how aggressive the bears have grown in this dip. The love for bitcoin is well-known but the hate is there as well. I don't know if that resonates through the price in the same way but it's worse than it was in the summer crash.
The vitriol is particularly high for Tether, which remains the achililes heel of the crypto system. Until there's far more transparency in that space, it will remain a spot of worry.
As for the fundamentals, they're trading in line with risk in general lately. In the week ahead, we'll hear from the FOMC and that will be a major driver of the risk trade. There's a solid consensus that the taper will be sped up. Assuming that happens,, the market reaction will hinge on commentary and guidance towards rate hikes once the taper is done.
