Bitcoin - Deceitful rally
Updated
Despite yesterday's move up in Bitcoin, we remain very skeptical about the prospect of rally continuation. That is mainly due to the FED moving toward a more hawkish stance in regard to its monetary policy. Indeed, now, it projects another 75bps rate hike for September 2022. As a result, we expect this to negatively affect the U.S. economy as well as the cryptocurrency market. Due to the persistence of these bearish fundamental factors, we have no reason to change our medium-term and long-term assessment of BTCUSD.
Illustration 1.01
Illustration 1.01 shows the trade setup we introduced recently; it consists of two alternative scenarios. Additionally, there are several technical developments displayed on the chart. The bullish trigger occurred when the price moved above 21 868 USD. Despite that, we are skeptical about this move. We are looking for the bearish trigger, which will take place once 21 868 USD is retraced to the downside. Low volume after the most recent breakout hints at a declining number of buyers between 22 000 USD and 24 000 USD.
Technical analysis - daily time frame
MACD, Stochastic, and RSI all show signs of stalling. DM+ and DM- are bullish; however, ADX contains a relatively low value. Overall, the daily time frame is neutral.
Technical analysis - weekly time frame
RSI is bullish. MACD is neutral. Stochastic is bullish but stays in the lower zone. DM+ and DM- remain bearish. Overall, the weekly time frame sends mixed signals.
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.
Illustration 1.01
Illustration 1.01 shows the trade setup we introduced recently; it consists of two alternative scenarios. Additionally, there are several technical developments displayed on the chart. The bullish trigger occurred when the price moved above 21 868 USD. Despite that, we are skeptical about this move. We are looking for the bearish trigger, which will take place once 21 868 USD is retraced to the downside. Low volume after the most recent breakout hints at a declining number of buyers between 22 000 USD and 24 000 USD.
Technical analysis - daily time frame
MACD, Stochastic, and RSI all show signs of stalling. DM+ and DM- are bullish; however, ADX contains a relatively low value. Overall, the daily time frame is neutral.
Technical analysis - weekly time frame
RSI is bullish. MACD is neutral. Stochastic is bullish but stays in the lower zone. DM+ and DM- remain bearish. Overall, the weekly time frame sends mixed signals.
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.
Note
These are the latest developments; the setup remains valid: Volume paints a negative picture.
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