Bitcoin - The stock market provides a temporary lifeline for BTC
Updated
Our latest post hinted at similarities between the structures of Bitcoin and Ethereum. We warned that Bitcoin was likely to follow the Ethereum's breakout below the support, which occurred a few hours later, and Bitcoin made a low at 28 003 USD. Then Bitcoin reversed back into the neutral zone and continued to climb higher over the weekend. Currently, BTCUSD trades around 30 600 USD. Despite that, we remain bearish on BTCUSD, and our price target stays at 25 000 USD. However, at the moment, we will pay close attention to the 31 411.18 USD support level. If the breakout above this level occurs, then BTCUSD is likely to continue higher - especially if the stock market continues its own “bear market rally.”; in our opinion, that would provide a further lifeline for cryptocurrencies in the short term, and as a result, BTCUSD could rise as high as 36 000 USD before resuming a downfall.
Illustration 1.01
Illustration 1.01 shows the recent breakout to the downside from the neutral zone.
Technical analysis - daily time frame
RSI and Stochastic are bullish. MACD also points to the upside. DM+ and DM- remain bearish. The ADX started to decline, which is reflected in the choppy price action of BTC. Overall, the daily time frame is neutral/slightly bullish.
Illustration 1.02
We will also pay close attention to the volume. We will monitor it to see if it will be sufficient to sustain a rally in a case of a bullish breakout. Insufficient volume accompanying the bullish breakout would suggest a bull trap.
Technical analysis - weekly time frame
RSI, MACD, and Stochastic are all bearish. DM+ and DM- are bearish too. The ADX increases, which points to a strengthening trend. Overall, the weekly time frame remains bearish. The same also applies to the monthly time frame.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Illustration 1.01
Illustration 1.01 shows the recent breakout to the downside from the neutral zone.
Technical analysis - daily time frame
RSI and Stochastic are bullish. MACD also points to the upside. DM+ and DM- remain bearish. The ADX started to decline, which is reflected in the choppy price action of BTC. Overall, the daily time frame is neutral/slightly bullish.
Illustration 1.02
We will also pay close attention to the volume. We will monitor it to see if it will be sufficient to sustain a rally in a case of a bullish breakout. Insufficient volume accompanying the bullish breakout would suggest a bull trap.
Technical analysis - weekly time frame
RSI, MACD, and Stochastic are all bearish. DM+ and DM- are bearish too. The ADX increases, which points to a strengthening trend. Overall, the weekly time frame remains bearish. The same also applies to the monthly time frame.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Trade closed: target reached
Our price target of 25 000 USD was reached.
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