Bitcoin - Crash imminent?
Updated
We pointed out a few short-term bullish signs in the past two weeks while maintaining the bearish stance for the medium and long term. In our opinion, the correlation between the stock market and cryptocurrencies continues to threaten the rally as the FED is set to worsen economic conditions tomorrow by raising interest rates. We reason that this will negatively impact the economy and spark another selloff after the decision (or with some latency after it).
Despite that, it would not surprise us to see market participants pile into depreciated assets because of hopes of the primary trend reversal (before the selloff). Indeed, we already notice many analysts calling for the market's bottom and new all-time highs during the current or next year. However, we dismiss these claims as the recent earning season in the United States confirmed our bearish forecasts about corporate underperformance (and progression into the second stage of the bear market).
Because of that, we have no reason to backtrack on our price targets of 17 500 USD and 15 000 USD. Quite contrarily, the erratic moves in the market and quick sentiment changes among retail investors support our thesis as these traits are characteristic of bear markets. Due to that, we remain very cautious and speculate that the bear market rally might be near its end.
Illustration 1.01
Illustration 1.01 shows the daily chart of BTCUSD and the percentage change from the June 2022 low to the current value + the percentage change from the August 2022 high to the current value.
Technical analysis - daily time frame
RSI is neutral. MACD is bullish. Stochastic performed a bearish crossover. DM+ and DM- are bullish. Overall, the daily time frame is bullish; however, the short-term bullish momentum is deteriorating.
Illustration 1.02
Illustration 1.02 shows the decline in volume following the recent buying spree, which is bearish.
Technical analysis - weekly time frame
RSI, Stochastic, and MACD rise but remain in the bearish area. DM+ and DM- are bearish. Overall, the weekly time frame is bearish.
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 be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Despite that, it would not surprise us to see market participants pile into depreciated assets because of hopes of the primary trend reversal (before the selloff). Indeed, we already notice many analysts calling for the market's bottom and new all-time highs during the current or next year. However, we dismiss these claims as the recent earning season in the United States confirmed our bearish forecasts about corporate underperformance (and progression into the second stage of the bear market).
Because of that, we have no reason to backtrack on our price targets of 17 500 USD and 15 000 USD. Quite contrarily, the erratic moves in the market and quick sentiment changes among retail investors support our thesis as these traits are characteristic of bear markets. Due to that, we remain very cautious and speculate that the bear market rally might be near its end.
Illustration 1.01
Illustration 1.01 shows the daily chart of BTCUSD and the percentage change from the June 2022 low to the current value + the percentage change from the August 2022 high to the current value.
Technical analysis - daily time frame
RSI is neutral. MACD is bullish. Stochastic performed a bearish crossover. DM+ and DM- are bullish. Overall, the daily time frame is bullish; however, the short-term bullish momentum is deteriorating.
Illustration 1.02
Illustration 1.02 shows the decline in volume following the recent buying spree, which is bearish.
Technical analysis - weekly time frame
RSI, Stochastic, and MACD rise but remain in the bearish area. DM+ and DM- are bearish. Overall, the weekly time frame is bearish.
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 be 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 17 500 USD was reached.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.