Stormrake - Insights #pullback

Tax Time with Stormrake & Syla

Wed, 11 Jun 2025 15:20:48 +1000

As we approach the end of the financial year, here’s a quick way to stay prepared for tax time.

Stormrake has partnered with Syla to provide a complete crypto tax report, fully tailored to Australian tax requirements. Whether you're lodging yourself or working with an accountant, Syla makes it simple to import your Stormrake transactions and calculate your crypto tax.

Stormrake exclusive offer:

Get 30% off any Syla plan with the code STORMTAX at checkout. Register here.

How to register an account on Syla

1. Visit Syla and click the Try Free button.

2. Sign up using your Google account or email and a password.

Importing your Activity Statement CSV

3. After signing up, you’ll be prompted to add a Data Source. In the search bar, type Stormrake and select it from the list.

4. Choose File Import and upload your Stormrake Activity Statement CSV.

Don’t have one? Reach out to your Broker at Stormrake to request your Statement.

Review and download your Crypto Tax Report

5. After importing, you’ll land on your Dashboard, where you can view a summary of your portfolio.

6. Do you have other wallets or exchanges? Head to the Data Sources page and click Add Data Source to connect them.

7. Go to the Transactions page to view your transactions. You can make edits if needed.

8. When you’re ready, head to the Tax Reports page to download your Crypto Tax Report. You’ll need to choose a paid plan before downloading.

9. Share your reportwith your Tax Accountant when preparing your tax return, or follow Syla’s guide for self-lodging your own tax return.

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The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

Stormrake is not a financial adviser and does not provide financial product advice. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your unique circumstances. Stormrake is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by this newsletter.

Disclaimer

All statements made in this newsletter are made in good faith and we believe they are accurate and reliable. Stormrake does not give any warranty as to the accuracy, reliability or completeness of information that is contained here, except insofar as any liability under statute cannot be excluded. Stormrake, its directors, employees and their representatives do not accept any liability for any error or omission in this newsletter or for any resulting loss or damage suffered by the recipient or any other person. Unless otherwise specified, copyright of information provided in this newsletter is owned by Stormrake. You may not alter or modify this information in any way, including the removal of this copyright notice.

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50 bps it is... Bitcoin is Strengthening

Thu, 19 Sep 2024 13:19:32 +1000

The first rate cut since March 2020 has taken place, and as forecasted, it was a cut of 0.5%, bringing interest rates down to a range of 4.75%–5%.

For those who were awake at 4 a.m., the volatility was immediate. Within one minute of the cut being confirmed, BTC surged from $59.9k to $61.1k before returning to $59.9k just 12 minutes later.

For those who are just waking up or checking the charts for the first time today, the market has had time to digest the news. BTC has responded positively, currently up 3.5% since the cut confirmation and trading above $62,000 USD.

In conjunction with the interest rate decision, U.S. Federal Reserve Chair Jerome Powell addressed the media, providing insight into the decision-making process and potential future rate cuts.

Key Takeaways from Powell’s Speech:

No rush to get easy monetary policy

Another 0.5% cut is expected; whether it occurs in one cut or two 0.25% cuts remains to be seen.
The Federal Reserve forecasts interest rates to land at 3.4% in 2025, implying a full percentage point of cuts next year, followed by another 0.5% in 2026.

The Fed will stay flexible, with data driving the pace of future rate changes.

Investors should not expect 0.5% cuts to become the norm—the Fed will act based on new data.

“I don’t see anything in the economy right now that suggests that the likelihood of a recession, sorry, of a downturn, is elevated,” - Jerome Powell

Stormrake Spotlight: FANTOM ($0.64)

FTM continues to outperform, up another 12%, bringing it to 27% since our first mention in the Morning Note. Other notable performers include SUI and CKB, which have gained 10% in the past 24 hours.

BTC/USD Key Levels and Price Action:

Source:https://www.tradingview.com/x/6zE7dQP9/

The 0.5% interest rate cut has sparked a positive reaction in Bitcoin and the broader crypto space. After struggling with the key $60,200 level, BTC has finally cleared it and is now approaching the next resistance at $63,800 with strength and conviction. This target is 3% away, and some resistance is expected as we approach it, likely leading to a small pullback. Any pullbacks should be viewed as buying opportunities, as the short-term trend has flipped bullish while the long-term outlook remains positive.

BTC Total ETF Flows for 18 Sep: $ - 52.7 million

(ETF flow data is sourced from https://farside.co.uk/btc/ and reflects figures at the time of writing.)

ETH/USD Key Levels and Price Action:

Source:https://www.tradingview.com/x/hVLBTlt1/

Ethereum has mirrored Bitcoin’s reaction to the interest rate decision. ETH has reclaimed all its moving averages and is heading towards a target of $2,556. However, it is expected to face strong resistance at this level, which has proven challenging for ETH to overcome in the past month.

ETH Total ETF Flows for 18 Sep: $ -15.1 million

(ETF flow data is sourced from https://farside.co.uk/eth/ and reflects figures at the time of writing.)

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Written by Alexandar Artis

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Bitcoin is Back!! (above 60k)

Thu, 19 Sep 2024 13:09:50 +1000

Yesterday’s Morning Note covered the poor performance of 99% of the crypto market, with the standout exception being Fantom. At the time of publishing yesterday’s article, FTM was trading at $0.50, and as of writing today, it is trading at $0.57 (up 15%). To ensure you don’t miss opportunities and insights like this, subscribe to our Morning Note and have it delivered straight to your inbox.

Over the past 24 hours, we’ve seen a bounce in the crypto market, with BTC reclaiming $60,000 USD. The main standouts are FTM, TIA, and SUI, all up by around 15%.

The upcoming FOMC decision will be crucial and is likely to dictate the short-term direction of the market. Expect heightened volatility and take a cautious approach when considering any buy/sell moves. There is already significant speculation surrounding the size of the rate cut. A larger cut of 50-75 bps could spark a market rally, while a smaller cut of 25-50 bps may result in the market staying flat or possibly declining. The probability favors a larger cut; however, it’s wise to remain vigilant and flexible in response to these major decisions.

For those actively trading or investing, the decision is scheduled for 4 am AEST tomorrow, followed by a speech by Jerome Powell 30 minutes later. The decision and speech will help investors gauge the Federal Reserve’s stance and sentiment on future interest rate decisions.

*Exercise caution, though, as a key event in the FOMC decision is set to occur in less than 48 hours.*

BTC/USD Key Levels and Price Action:

Source: https://www.tradingview.com/x/6RbW1hKn/

The strong support at $57.7k provided an ideal bounce zone for purchasing BTC. We’ve seen BTC bounce and turn the $60.2k resistance level into support. It’s likely BTC will consolidate around this level until the interest rate decision early tomorrow morning. Leading up to and following the announcement, we can expect volatility, with BTC either rallying toward the next key target of $63.8k or potentially dropping back to $57.7k.

BTC Total ETF Flows for 17 Sep: $ - 96.3 million

ETH/USD Key Levels and Price Action:

Source: https://www.tradingview.com/x/6zwJMPje/

ETH has begun to show some signs of recovery. While it remains relatively sideways between two levels, ETH has broken above both the 21 and 55 EMAs, resulting in a bullish crossover. Depending on the outcome of the rate decision, we could see ETH approach the resistance level of $2,556 or the support level of $2,171.

ETH Total ETF Flows for 17 Sep: $ -15.1 million

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Written by Alexandar Artis

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This Cryptocurrency has outperformed 99% of the top 100.

Tue, 17 Sep 2024 11:15:29 +1000

It’s been a bad day for cryptocurrency, with almost every coin in the top 100 showing losses. However, Fantom (FTM) has defied the broader market trend ahead of its upcoming migration to Sonic (S). But why is FTM performing differently?

The anticipated migration of Fantom (FTM) to the new Sonic network has drawn significant attention due to its promise of enhanced performance and scalability. Sonic is set to become a faster and more efficient Layer 1 blockchain, capable of handling up to 200 million transactions per day. With cross-chain interoperability, particularly with Ethereum, Sonic opens the door to new dApps, liquidity, and use cases, making it an attractive option for both developers and users. Additionally, the Fantom Foundation is backing this migration with substantial financial incentives, including $120 million in grants to encourage project migration.

The anticipation of these technological upgrades, combined with strong financial backing, has fueled investor optimism, leading to FTM's price resilience against BTC and nearly 99% of other cryptocurrencies.

FTM should be on the radar of any crypto portfolio as it continues to be a leader in Decentralized Finance (DeFi) with consistently upgrades. With FTM currently at $0.50, this could be a great opportunity to continue dollar-cost averaging (DCA). Fantom’s strength during a market downturn is a highly positive signal, as coins that show resilience in downtrends often lead the charge when the market recovers.

*Exercise caution, though, as a key event in the FOMC decision is set to occur in less than 48 hours.*

Source: https://cryptobubbles.net/

BTC/USD Key Levels and Price Action:

Source: https://www.tradingview.com/x/fjaB7F8F/

As expected, BTC reached the support region of $57.7k and has been consolidating at this level. The convergence of support suggests a potential bounce. If a rebound occurs, we could see a re-test of $60.2k. However, prolonged consolidation at this support level without an upward move might signal a breakdown toward the lower support level of $54.5k.

BTC Total ETF Flows for 16 Sep: $ -8.1 million

ETH/USD Key Levels and Price Action:

Source: https://www.tradingview.com/x/YBhzQAn8/

ETH remains in a downtrend, showing continued weakness as it has broken below all major moving averages. The next support level is $2,171, and it seems to be a question of "when" rather than "if" it will reach that level.

ETH Total ETF Flows for 16 Sep: $ -13.6 million

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Written by Alexandar Artis

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The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

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ANOTHER ASSASSINATION ATTEMPT ON DONALD TRUMP

Mon, 16 Sep 2024 12:08:52 +1000

The Secret Service has foiled a second assassination attempt on Donald Trump during his round of Golf overnight.

Following the first assassination attempt, markets rallied, as the so-called ‘Trump Pump’ seemed to materialise. BTC rallied 15% over the next five days. However, the recent attempt has yet to produce a similar market reaction, with BTC down over 2.5% in less than 8 hours.

We can expect the next 72 hours to be highly volatile due to the upcoming FOMC meeting. An interest rate cut is widely anticipated, with the only remaining question being: "How significant will it be?" The current interest rate range is between 525-550 basis points, and the probability favors a larger cut of 50-75 basis points rather than a smaller one of 25-50 basis points.

Source: https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

BTC/USD Key Levels and Price Action:

Source: https://www.tradingview.com/x/u3j3G3sg/

After a few bullish days for Bitcoin, it seems the bears are regaining control. The bears have successfully defended the key resistance level of $60.2k, and now BTC is approaching the next support level at $57.7k. Both the 200 SMA and EMA converge around this level. A growing concern for BTC is the potential bearish cross of the 21 and 55 EMAs (the yellow crossing below the green line), which would confirm a short-term bearish trend.

BTC Total ETF Flows for 16 Sep: $ N/A

ETH/USD Key Levels and Price Action:

Source: https://www.tradingview.com/x/xoacuR2y/

Ethereum continues to show weakness against Bitcoin. ETH has already experienced a bearish cross of the key 21 and 55 EMA and has fallen below both the 200 EMA and SMA. The $2,171 support level remains crucial and will likely be re-tested due to ongoing bearish pressure.

ETH Total ETF Flows for 16 Sep: $ N/A

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Written by Alexandar Artis

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A Healthy Pull Back for a Bullish Structure

Sat, 10 Aug 2024 12:11:34 +1000

Following Bitcoins largest daily candle since October, it was expected that a pullback would occur to maintain a bullish structure. To those who are still new to the Crypto markets, nothing good ever goes just straight up. A healthy chart of an asset is one that experiences a consolidation phase after a move up.

A healthy chart may look like stairs or a number of flags. This chart below shows the current Bitcoin bull run, which has demonstrated many instances of these consolidation periods after a move up. Regardless of what time frame you chart with, to maintain bullishness, this structure is key.

Within the Crypto space, there are chart patterns we refer to as the ‘Burj Khalifa’. This pattern is often found with sh*tcoins and meme coins alike, to keep things simple, it's when a chart looks like the building of the Burj Khalifa. With price rocketing straight up, before coming down just as fast. Whilst the gains may supersede anything you’ve experienced before, they often disappear before you can even think to take profit, leaving investors with worthless coins that were once in great profit. The following meme coin chart is a prime example of the ‘Burj Khalifa’ pattern.

BTC/USD Key Levels and Price Action:

Bitcoin bulls remain in control, as mentioned yesterday the key support level for BTC sits at $60,200, this was tested overnight. This is of no concern, as the bullish structure remains. Whilst we sit at this level, it provides a good opportunity to dollar cost average into your BTC allocation, as buying at support rather than into resistance often yields higher returns. Yesterday’s target of $63,800 remains and likewise $57.5k to the downside if the support fails.

BTC Total ETF Flows for 9 Aug: $ -99.3 Million

ETH/USD Key Levels and Price Action:

Similarly to Bitcoin, Ethereum has experienced a retest of the key support level $2,556. We still maintain a bullish bias whilst above this and our target for ETH remains at $2,865. Meanwhile our expectation for ETH if we are to lose the current support would be a retest of the $2,171 support level.

ETH Total ETF Flows for 9 Aug: $ -35.4 Million

Written by Alexandar Artis

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A 291 Day First for Bitcoin

Fri, 09 Aug 2024 13:29:57 +1000

Bitcoin's first 10% + day since October 2023

To those checking the charts for the first time today, yes, Bitcoin has had its first green 10% candle in 291 days (October 23, 2023). What feels like a well deserved candle for the patient investors, it is even more sweet for the ones who bought the recent dip. The investors who saw the opportunity and took it without haste could be up as little as 14% to as much as 25% assuming one bought below 54k.

Many of our clients at Stormrake saw the opportunity and grabbed it with both hands and are now reaping the benefits. To ensure you don’t miss these rare opportunities, subscribe to not only our morning note, but also our weekly and monthly articles .

TON begins trading on Binance:

Whilst the entire crypto market rallied, one coin went early. This was TON (The Open Network), why? To understand why, let’s refer back to our ‘Is there a TON of opportunity in Toncoin?’ article written by us back in the middle of June. We identified the strength and market support of TON, a relatively new coin that made its way into the Top 10 only a few months ago. As predicted in the article, TON would be listed on Binance. Immediately after the announcement, TON experienced a 16% pump within two hours.

The research provided in our article has led our clientele to purchase a high volume of TON. These clients are more than pleased with the coin’s recent performance and will likely continue to reap the full reward of a Binance coin listing. It is not too late to buy TON, with the average return of a Binance Listing being 73%. Pair this with a full fledged bull run and you’ve got something great waiting to happen.

BTC/USD Key Levels and Price Action:

It’s safe to say that the last two US trading sessions have been a tale of two halves for BTC. Yesterday's US session saw BTC fall and retest a key level of $54.5k, whilst last night's session saw BTC rally and break through two key resistance levels. We are now sitting above the orange support line of $61,200. If BTC is to retest this support and hold, we remain with a bullish structure and $63,800 is our next target. Let’s see if the bullish momentum from the US can translate across to the Asian session.

BTC Total ETF Flows for 8 Aug: $ +37 Million

ETH/USD Key Levels and Price Action:

Ethereum’s recent weakness vs Bitcoin may be coming to end. This morning's recent pump has seen ETH break above the recent hurdle of $2,556 and end the day up almost 15%. As we stay above it and the once resistance turns into support, ETH’s next target sits at $2,865 (approximately 7% from current price action).

ETH Total ETF Flows for 8 Aug: $ -14.6 Million

Written by Alexandar Artis

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Reach out to us at Stormrake for further market insight and allow us to help you navigate the sea of mania and laser-eye memes, so that you can realise your goals in the market!

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The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

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The Currency Trade That Crashed Global Markets

Thu, 08 Aug 2024 14:50:14 +1000

The Aftermath of the USDJPY Standoff

Our April edition of the Rake Review included an educational piece on the standoff between the US Dollar and the Japanese Yen. Months ago, the Yen was at 30 year highs of 160 with interest rates of 0%. As predicted, an intervention occurred as the Yen was beginning to reach an unsustainable level.

The low interest rates led to carry trades on the Yen by foreign inventors. A carry trade refers to borrowing a currency at a low interest rate and re investing into a currency or financial asset that provides a higher rate of return. The Bank of Japan has held negative interest rates for the Japanese since 2016, giving foreign investors the opportunity to conduct a carry trade through the Yen. However, the recent interest rate hikes by the BOJ had foreign investors panicking.

The unexpected rate hike to end July saw foreign investors scramble to repay the borrowed Yen by selling off the assets that were bought with these borrowed funds. The sale of the assets led to markets cascading, and experienced some of the largest amounts of liquidations and money wiped out of the market since Covid.

$2.9 Trillion was wiped out of the stock market and almost $1.1 billion dollars of leveraged crypto positions were liquidated all within 24 hours amid recession fears. Over these 24 hours, the S&P 500 fell approximately 4%, one of the worst days for the stock market in the last four years.

$2.9 Trillion wiped out of the Stock Market, Source: @RadarHits via X

Is the US in a Recession?

Whilst investors rushed to repay their borrowed Yen, US unemployment numbers were released. It was forecasted that the unemployment rate would be 4.1%, whilst the actual rate turned out to be 4.3%. This unexpected rise in unemployment triggered the ‘Sahm Rule’, one of many recession indicators. The Sahm Rule indicates a recession has started when the three-month moving average of the US unemployment rate is 0.5 percentage points or more above its lowest during the previous 12 months. The current 12 month low is 3.8%, with the recent increase to 4.3% thus meaning the 0.5% increase from the low has been fulfilled. Hence, the mass panic sell off and calls for an emergency US Federal Reserve meeting to deal with the potential recession.

Source: @GRDecter via X

The interplay between the US Dollar and the Japanese Yen has significantly impacted global financial stability. The Bank of Japan's unexpected interest rate hike led to substantial asset liquidations and market sell offs, while rising US unemployment rates triggered the Sahm Rule, signalling a potential recession. Although markets have seen some positive recovery, further downside risks remain. Our Rake Review will continue to monitor these developments, providing insights to keep you informed and prepared for what lies ahead.

Written by Alexandar Artis

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The Spot Ethereum ETF is Here as is Mt Gox’s Repayments

Wed, 24 Jul 2024 19:09:21 +1000

Spot Ethereum ETFs Begin Trading:

Another big day for cryptocurrency as the Ethereum Spot ETF was launched and eclipsed $1 billion of volume in its first day of trading. However, the net inflows of the ETF was just over $100 million. Meaning the outflows from Grayscale totalled almost half a billion dollars.

Source: https://farside.co.uk/?p=1518

Similarly to the Spot Bitcoin ETFs first day of trading, it was highly volatile and turned out to be a sell the news event. The day saw a net inflow of $203 million, this was greatly hindered by the mass outflows by Grayscale of almost $500 million.

There are parallels between Bitcoin and Ethereum price action at the first day of their respective ETFs trading.

Both BTC and ETH were approximately 40% away from their previous all time highs.

The launch days were ‘sell the news’ events with the majority of the gains and price increase being made in the lead up to the event.
Grayscale BTC and ETH ETFs were finally allowed to trade again, which lead to major outflows.

If Ethereum is to follow Bitcoin’s post ETF price action, we may see a retracement in Ethereum’s price due to the mass selling by Grayscale. The first fortnight of BTC ETFs trading saw a 20% retracement in BTC due to Grayscale outflows. A similar trend may occur with ETH as Grayscale outflows should sustain selling pressure on ETH until they exhaust their outflows (a 20% pullback would see Ethereum at ~$2,800).

The ETF hype drove BTC to new ATHs prior to the BTC Halving event, this occurred 2 months after BTC ETF was launched. Aforementioned, ETH is ~40% from its ATH, will we see a new ATH set by ETH in the coming months as a result of the ETFs?

Mt Gox. Continues to Make Repayments:

This positive news has been overshadowed by Mt Gox. moving almost $3 Billion dollars worth of BTC onto exchanges to continue repayments. What was one of the major catalysts of driving BTC down to 54k has reared its ugly head again. If Mt Gox is to sell all of this BTC, then it will outweigh all of the BTC ETF inflows over the last couple weeks which helped BTC recover from $53.5k to the current price. Whilst it is unlikely to see these repayments negate all of the gains BTC saw as a result of the inflows, it would be wise to expect a slight pullback.

If a pullback is to occur, this should be seen as a time to 'buy the dip' before BTC continues on higher.

While the immediate impacts of the Ethereum Spot ETF launch have mirrored the volatility seen with Bitcoin's ETF debut, the long-term outlook remains highly favorable. The initial sell-the-news reaction and significant outflows from Grayscale have temporarily pressured Ethereum's price. However, if Ethereum follows Bitcoin's post-ETF trajectory, any short-term retracements could pave the way for substantial gains and potentially a new all time high in the months ahead. We remain bullish on Ethereum, confident that the long-term effects of an Ethereum ETF will further solidify its position as a leading asset in the cryptocurrency space. The introduction of the ETF is expected to drive increased institutional interest and broader adoption.

Written by Alexandar Artis

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Are We Back?

Tue, 16 Jul 2024 17:58:07 +1000

If someone asks what it feels like to be invested in crypto, show them the cover image. It's a perfect depiction of what being invested in cryptocurrency feels like.

Not too long ago the entire crypto market was in a state of despair with fear being extremely high and Bitcoin looking like it may fall below $50k. Bitcoin has recovered over 20% and has now touched $65k. It seems as though those who were brave enough to purchase BTC when the market was extremely fearful have been rewarded.

Does this mean we’ve seen the pullback lows for this correction and the bull market is back on. Most likely, yes, but let’s dive deeper to get an understanding of what may be in store after this recent Bitcoin price action.

Fundamental Overview:

Whilst BTC rallied more than 10% over the weekend, the headlines capturing every media outlet was the attempted assassination of former US President Donald Trump. Trump is the self-proclaimed ‘Crypto President’ and has announced his support for Bitcoin. Many speculated that if Trump were to win the election, the ‘Trump Pump’ would occur and see Bitcoin and other markets rally. However, the recent events over the weekend may have kicked off the ‘Trump Pump’ early. BTC rallied 10%, and Trump related meme coins such as TRUMP rallied 70%.

A major catalyst for Bitcoin’s pullback to the low of $53.5k was the German Government selling their seized Bitcoin. This snowballed along with the US DOJ selling their seized assets and Mt Gox’ repayments. It has been reported that the German Government has fully exhausted their seized Bitcoin, thus relieving BTC of major selling pressure. With this lifted, allowed BTC to regain $60k and almost reach $65k less than a few days after this information was reported. The image below shows the balance of the German Governments' Bitcoin wallet. Almost $4B worth of Bitcoin was sold off over the since June with nearly $3B of the selling occuring within the last week.

A clearer view of the above image can be found here: https://static.news.bitcoin.com/wp-content/uploads/2024/07/german-government-donated-btc-1536x540.jpg

Inflation is showing signs of easing with the latest CPI data set coming in under forecast for the third month in a row. This has resulted in some calling for two interest cuts towards the backend of the year. As expected, decreasing CPI figures leads to bullishness in risk on assets. BTC has reaped the rewards of these figures. The next key event to watch out for is the upcoming FOMC meeting where the next interest rate decision will be made. The graph below shows the likelihood of the decision, it is more than likely that we don’t see a change in interest rates at this meeting. However, the meeting in September shows a high probability for the first interest rate cut.

Future interest rate probabilities can be found here: https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

All of these events over the past week have been bullish for Bitcoin which has been reflected in price action and may have set the tone for the remainder of the year.

Technical Overview:

From a technical standpoint we delve into a recent Bitcoin chart to gain an understanding of what is to come.

A clearer view of the above chart can found here: https://www.tradingview.com/x/W3AE9D6g/

The chart above may seem daunting at first, however, it is quite simple. The current breakout and the creation of a new higher high indicates that the trend has begun to flip bullish and momentum is with the bulls. To solidify the trend switch and bullish case back on, the next pullback that occurs must create a higher low (stay above the recent low of $53.5k).

The two fair value gaps displayed on the chart above provide us with a probable area of where to expect the pullback to reach. The lower fair value gap sits at approximately $58k with the closer one around $61k (5-8% retracement). If BTC were to retrace to this level and then continue upwards from there, the upward trend would be confirmed with a higher low being set.

Things are looking bleak for the bears right now, they failed to push BTC below $50k and have seen over $400 million USD worth of shorts get liquidated over the last four days. To fuel the bearish hopium, one would hope that this major move is one massive bull trap due to the potential hidden bearish divergence that could be setting in. Hidden divergence often leads to a continuation of the overall trend. Divergence will be confirmed if BTC fails to get above $66.5k on this move up before a pullback. The divergence should drive BTC down to the pullback regions mentioned above, if the divergence is strong enough and bears continue to push BTC below these levels, then a bull trap may be confirmed. But until then, the momentum remains with the bulls and the likelihood is that we continue higher after a small pullback.

Whilst things look bullish and we have seen the majority of coins move 20%+ over the last week, with some meme coins such as WIF returning 40% since the lows. However, it is way too premature to call for an alt season or even a full fledged bull run, BTC remains 15% from its all time high. Whilst majority of altcoins are yet to set a new ATH, ETH remains 30% away from its ATH set back in 2021, whilst WIF (which returned 40% in a matter of days) is still 55% away from its April ATH.

Whilst 30% or 55% away from ATH may not seem too distant, coins require a much greater increase to recoup a loss. The graph above provides the visual description on what is required to make up for a 30% or 50% drawdown. Majority of altcoins are down 50-70% from their ATHs, alt season will need to arrive for them to have any chance at creating new ATHs. The general rule of thumb is that once Ethereum has made a new ATH, then alt season is set to begin.

Things are looking good for Bitcoin and the crypto market, but we are not out of the woods just yet. Fundamentally, Bitcoin looks strong and to be bullish, whilst some technical analysis may suggest a slight glimmer of hope for the bears. Overall, Bitcoin remains an asset we are long term bullish on, pullbacks may be scary and emotional, but they present the investors with golden buying opportunities. If a potential pullback is to come, then be sure to take advantage of it by purchasing Bitcoin.

Written by Alexandar Artis

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The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.