Sometimes it seems one week in the world of crypto moves at the speed of three months in the traditional markets.
If you recall, last week Cameron Winkelvoss called out Barry Silbert of Digital Currency Group (DCG) for potential solvency issues and potential co-mingling of assets between Digital Currency Group (DCG) and Grayscale Bitcoin Trust (GBTC). It would appear things are escalating quite rapidly on that front.
It would appear Digital currency Group is currently being investigated by the US SEC and the US DOJ over suspicious funds transfers according to Yahoo Finance.
Digital Currency Group in Spotlight Over Suspicious Fund Transfers
“Crypto-focused conglomerate Digital Currency Group (DCG) is under investigation by the U.S. Department of Justice as well as the Securities and Exchange Commission (SEC) over questionable transfers between DCG and a subsidiary, according to a Bloomberg report that cited unnamed sources.”
Additionally, Bloomberg is reporting Dutch Crypto Exchange Bitvato rejected an offer by Digital Currency Group (DCG) to pay 70 percent of its outstanding debt to Bitvato.
Dutch Crypto Exchange Says Digital Currency Group in Talks With Creditors
…and of course this led to a call for removal of Barry Silbert from Digital Currency Group (DCG) by Cameron Winkelvoss (Yahoo Finance analysis link below).
DCG, Gemini Tensions Escalate as Winklevoss Calls for Removal of Barry Silbert
The ramifications of a potential Digital Currency Group insolvency – and by extension a potential insolvency of Greyscale Bitcoin Trust – would have a material impact on the entire crypto ecosystem. It would appear that the Cryptocurrency Ecosystem may need to brace for a hard landing.
With that, Let’s get to the TA. (My methodology is Point & Figure/Wyckoff.)
The recent PA move took Bitcoin to a confluence of resistance at $17,400 USD where the broken support trendline (started from the Secondary Test at $15,600 USD) and the resistance trendline (started from the UTAD local top at $18,200) meet. The PA should experience rejection here, with price falling into the $15,800 USD region on a Sign of Weakness (SOW) as the formation moves into Phase D of the Redistribution. The projected price for this Wyckoff Redistribution phase would be ((9 columns x 200 box size x 3 box reversal) * 2/3) - $17,000 = $14,600 region based upon the existing cause in the formation. A breakout above $17,800.00 would invalidate this bearish scenario.
Something worth reminding about: One thing to be acutely aware of in a Wyckoff Redistribution cycle is these cycles generally have three waves – each with diminished intensity as a rule of thumb. It is entirely possible after BTC settles into a new Trade Range in the $14,600 region, the formation will move through a normal Phase A Wyckoff Accumulation right before experiencing a Change of Character and transforming into a third Wyckoff Redistribution only to take the PA to a lower Trade Range.
Always remember this is not trading advice.
Outside of that, Happy Trading.
Posted Using LeoFinance Beta
Yeah, we are not through yet. Only if we rise above 20,5-21k the bottom seems to be in. 🤞🏻
Ironically, even with yesterday's pump to $18,200, the TA points to a bearish structure remaining intact. If anything, the run created a High Pole Warning which suggests a retrace to $17,600, followed by a relief rally to the Last Point of Supply (LPSY) in the $18,000 region, then a fall on a Major Sign of Weakness to the $14,600 region.
With the CPI release today coming inline with expectations, I'm on the sideline waiting for confirmations before taking any position. I think once I see a reversal at the LPSY signaling the second leg down, I'll look to take a short position with a TP of $14,600. I think the R/R is worth it at that level.
Good analysis LP! Yes we could well make another low around 14k before the bottom is really in.
Thanks @borisengelaber I appreciate the kind words. Another coin I've been patiently waiting on is MATIC. It should retest the $0.60 - $0.70 region right before retesting the $1.05 highs and it's looking like a very solid swing trade if everything plays out.
Yes I am watching that soon. Polygon has had a hell of a year 2022 with lots of excellent partnerships like Starbucks or Disney.
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