Awaiting US inflation numbers this afternoon, Bitcoin is hovering around its $30,000 support. Cryptocurrency investors are hoping things will settle down by the time this economic stat is released. Indeed, it has not ceased to cause tensions on the financial markets since December 2021. This largely explains the poor dynamics of risky asset classes.
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Due to its high correlation with US equity indices (S&P500 and Nasdaq), BTC prices remain under pressure. And the fact that they are fully surfing in a bear market could lead to a new bearish leg, potentially synonymous with a capitulation phase. But in the meantime, and in the hope of seeing the peak of US inflation behind us, the door remains open for a possible technical rebound. History to calm the ardor of the sellers.
Bitcoin – The yoyo around $30,000 continues
Despite the end of nine consecutive weeks of decline, Bitcoin struggles to bounce past the $30,000 support. Indeed, the state of the two weekly bullish candles (including that of this week) shows that buying tendencies are long overdue. Especially since it is not easy to restore the confidence of many investors, following the collapse of the stablecoin UST.
Even if a technical rebound were to emerge, it will not be able to thwart the downward momentum of the 30-week moving average (MM30 weekly). To the point of wondering if it’s not like going up to better fall afterwards. A scenario that would not be really surprising in a bear market. And this, since the BTC broke the bottom of its tidy or horizontal channel (orange rectangle).
In the event of a technical rebound on $30,000 that would hold water, Bitcoin prices would return in the best case towards the resistance of $35,000or the bottom of its tidy. And if things are done right, it would also coincide with a return to contact with his downline.
Bitcoin – A Palpable Hesitation in Daily Units
Very logically, the two timid weekly bullish candles translate into daily units by a mini range (blue dot) around the $30,000 support. The latter following another, this time evolving slightly below this critical level. Clear proof that hesitation remains palpable on the side of investors. With a moving average at 200 days (MM200 daily) which evolves parallel to the descending line and encourages not to be against the current trend.
In this continuity, the MACD and the RSI seem to be marking time. On the one hand, the first stumbles below the zero line and dangerously reduces its bullish deviation from the signal. And on the other hand, the second failed twice below the neutral zone at 50. Thus, a bearish reversal in these two technical indicators would be a serious headwind to a possible technical rebound in BTC prices. In which case, the risk of a downward acceleration towards its lows of the year around $25,000 could well become clearer.
BTC – Far from a capitulation phase
With Weinstein’s phase 4 expanding, head-to-shoulder (ETE) and downline engaged since his last ATH, the Bitcoin bear market is likely to bog down both graphically and fundamentally until proven otherwise. And, despite a possible technical rebound towards $35,000, the sellers have all the cards in hand to reverse the last front line. The one where buyers are still clinging to the hope of a bullrun.
As central banks are forced to tighten their monetary policies, Bitcoin, prisoner of its correlation with equity indices, risks being negatively impacted again. This even though its prices have already fallen. To the point of wondering whether the consequences of the abundant excess liquidity of the Covid-19 crisis are not yet relevant.
If bad news were to be added to the current uncertainties on the financial markets, new episodes of stress could resurface. Thereby, a capitulation should be expected which would be the final phase of this bear market. Which would mean that Bitcoin would drop below its lows for the year. And it is only when this wound is effectively closed that it will be time to return to buying at prices that are suitable for institutional investors.
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