The king of cryptocurrencies still threatened by a new ATL! – Although the week had started well, Bitcoin (BTC) is on the verge of almost returning to where it was last Sunday. This is to tell you how uncertain the short-term trend remains. And the least we can say right now is that bulls and bears neutralize each other around the $ 20,000 support, which, as a reminder, symbolically represents the ATH of the 2017 bull run.
The former would like to put an end to this bear race at all costs, which in a few weeks will soon reach a year. As for the latter, they would wait for the opportune moment to annihilate the hopes of a favorable turnaround. Especially since the FED was no longer able to open the liquidity doors as before due to inflation which is unable to fall significantly.
The latest technical analyzes currently confirm a status quo fragile of the king of cryptocurrencies around $ 20,000. Given the market environment, we may feel that we are closer to a sinking rather than a release. Hence the question of a possible capitulation phase that would definitively undermine the morale of the bulls.
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Bitcoin in monthly units – Towards a third consecutive month of decline?
For the second consecutive month, Bitcoin closes in red. However, it retains the $ 20,000 support. And if the essentials are safe for now, things shouldn’t escalate into October. Because that would mean that the cryptocurrency king’s race to the bottom could start a new wave of correction. With new lows for the year that would be in sight. As a reminder, October is often marked by historical collapses such as 1929, 1987 or 2008.
By taking a step back from BTC’s position relative to the Ichimoku curves, we could console ourselves with prices and a Chikou Span above the Kumo. But what matters most to traders / investors is the recent momentum. And it is clear that it does not bode well.
Furthermore, I would be concerned primarily with the respective evolutions of the Tenkan and the Kijun in monthly units. A shift of these two curves of the Japanese technical indicator would mean a breakout of $ 20,000 sooner or later.
Bitcoin in weekly units – On hold
The wait-and-see attitude has dominated since mid-September. In fact, Bitcoin remains stuck at around $ 20,000. From there to considering it as an encouraging technical signal, we do not exaggerate the greater risks that investors face. Especially since the status quo of the underlying price and the Chikou Span below the Kumo continue to stall in weekly units. Not to mention that prices are currently below the Tenkan.
Despite the proximity of BTC prices to the descending line, note also the decline of the Kijun, which in turn may be closer to the Tenkan. And the last time we had a similar technical signal, this had caused the previous wave of correction last spring. This is enough to give the bulls new cold sweats.
In case the yo-yo of around $ 20,000 goes bad, there’s no need to draw a picture. Not because the bear race would resume. But why the losses could increase more seriously than expected. With a capitulation that could cause psychological damage.
Bitcoin in Daily Units – Simultaneous Failures Below the Kijun and Descending Line?
In daily units, things would start to clear up. Alas, Bitcoin prices are said to have been climbing below the Kijun and the descending line simultaneously since last Wednesday. And should it be confirmed over the weekend, the sub-$ 20,000 threat should once again be taken seriously.
Not only that, the prices of BTC and the Chikou Span are quoted below the Kumo. But we find a convergence of negative technical signals on the weekly and daily charts. In this sense, everything would lead to the belief that the king of cryptocurrencies could eventually sink himself.
In order for endogenous or exogenous catalysts not to intervene unfavorably, the bearish race of the king of cryptocurrencies would return to the front row towards the supports of $ 16,000 and $ 12,000. With the threat of a price that in the medium term would fall to four figures.
While we don’t see anything new from last week, the tensions surrounding the cryptocurrency king would become more and more pressing. At that point the bulls are likely to leave their last strength in the battle at around $ 20,000. From a graphical point of view, the considerable depth of the future Kumo in weekly units suggests a complicated start to the year 2023.
As for the fundamental aspect, the recent news on the financial planet does not work in favor of a Bitcoin explosion in the immediate future. On the one hand, various Fed members fiercely confirmed the extent of monetary strengthening, despite the potential start of a recession. On the other hand, inflation in the United States is not falling enough to induce a change of course. And as if that weren’t enough, the drop in the unemployment rate due to rising wages would sustain the rise in the prices of goods and services for quite some time.
This is why cryptocurrencies sensitive to lack of liquidity may still suffer in reference to the words of Jerome Powell. And as long as the rate hike cycle continues, Bitcoin will remain cold until the next clearing.
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