Structural Progress Remains Elusive for BTCUSD
Updated
Primary Chart: Showing Major Retracement Levels for BTCUSD's Entire Bear-Market Decline with Accompanying Down Trendline
Since November 2021 to early January 2022, equities and cryptocurrencies have experienced a bear market. The selloff has been more pronounced in crypto assets than in equities generally, although certain segments of equity markets have paralleled (in percentage terms) the massive declines seen in crypto.
BTCUSD Has Not Reached Key Fibonacci Retracements Like Equity Indices Have
The Primary Chart at the top of this article shows the major retracement levels for BTC's entire bear-market decline. Note how BTC's 43% rally from June 2022 lows has still not meaningfully approached its .382 retracement level of its entire bear-market decline. By inference, if BTC hasn't been able to approach its lowest .382 retracement level, it has come nowhere near its .50 or .618 retracement levels, labeled on the Primary Chart above.
Supplementary Chart A below shows an example of one of the world's leading equity indices, the US S&P 500, having reached and even surpassed critical retracement levels in the powerful rally off June 2022 lows. Whether this rally is a bear rally or an actual trend reversal is hotly debated in the financial media, but the outcome remains uncertain despite confident forecasts in both directions.
More importantly, note how the S&P 500 (
SPX) has exceeded both its .382 retracement and its .50 retracement of its bear-market decline. In fact, it is approaching its .618 retracement of its YTD decline. When price closes in on a key level of multi-month importance, it often will find a way to touch that level given the magnetic effect it has.
Supplementary Chart A: Two Key Fibonacci Retracement Levels for the YTD Decline in S&P 500 (SPX500USD)
Key Levels in Proximity to BTCUSD's Current Price
As shown in Supplementary Chart B, BTC has remained in a parallel channel off the June 17, 2022 lows. Some might argue this technically works as a bear flag pattern—confirmation would be a downward breakout that holds below the upward trendline forming the base of the channel.
In any event, this channel has contained price since mid-June 2022 lows. The return line (top line of the channel) lies near $25,700 to $26,282. This should prove to be strong resistance in the coming week. The lower line ranges from about $22,200 to $23,100, which should prove to be support—and given that the downtrend line remains intact, this should also be watched for a break.
The .382 retracement of the second leg of this bear market lies at $29,297. If BTC can break above its downward trendline—indeed, this would be a feat should it occur—the .382 should then also be watched to determine how price responds. This should serve as decent resistance at least on any initial attempt to push above it. but traders and market watchers should remain open-minded and flexible to see whether BTC could break above this level as equity indices have done. With FOMC minutes being published Wednesday
Supplementary Chart B: BTCUSD's Down Trendline and Fibonacci Retracements for the Second Leg of This Bear-Market Decline Starting at March 28, 2022, Swing Highs
Ichimoku Cloud Remains Bearish with a Hint of a Change
The Ichimoku Cloud can sometimes offer an additional perspective. The cloud remains bearish—red and downward sloping. (The mechanics of the cloud's color changes are beyond the scope of this article.) The could twists and turns green, however, in late August 2022 / early September 2022. Such cloud formations can suggest the potential for a shift in trend—but no guarantee.
Currently, price is meeting powerful resistance along the upper edge of the cloud's SSB (Senkou Span B) line. See Supplementary Chart C (below). This line works as resistance from about $24,700 to $25,000. This SSB line represents the mid-point of a 52-day period on the daily chart. Several candles have touched, briefly pierced, and then failed back below this key level. This shows that the level is holding a strong resistance for now.
Supplementary Chart C: BTCUSD's Ichimoku Cloud Chart on the Daily Time Frame
The weekly Ichimoku Chart remains more bearish in appearance. The cloud remains thick and red with no trace of a bullish twist in the future that could imply a possibility for clear skies ahead for BTC. The weekly chart also shows price significantly below the cloud, and even well below the Kijun line (blue), while having risen above the Tenkan line (gold). See Supplementary Chart D (below).
Supplementary Chart D: BTCUSD's Ichimoku Cloud Chart on the Weekly Time Frame
The author has no open position at the time of publication (August 17, 2022) on BTCUSD or BTC-related investment products such as BTC futures, BTC ETFs (BITO) or BTC derivatives.
This article is intended to present a relatively unbiased technical analysis of BTC's
DISCLAIMER: This post is published solely for educational / entertainment purposes and does not constitute financial advice or an investment recommendation and cannot account for any person's particular financial circumstances. The author would not want other investors / traders to lose money by relying *solely* on this idea rather than doing their own due diligence. Before entering any trade, please evaluate the risks of (i) the instrument / security being traded, (ii) the type of trade and its timeframe, (iii) risks inherent in that type of trade and its time frame, (iv) the inherent risks of shorting securities (presenting unlimited risk without hard stops in place), (v) the inherent risks of trading options, leveraged ETFs, and cryptocurrencies, and (vi) all financial risks arising each person's personal financial circumstances.
BTC1!
BTCUSD
BTCUSD
BTCUSDT
BITOUSD
SPXSPX500USDSP500
Since November 2021 to early January 2022, equities and cryptocurrencies have experienced a bear market. The selloff has been more pronounced in crypto assets than in equities generally, although certain segments of equity markets have paralleled (in percentage terms) the massive declines seen in crypto.
BTCUSD Has Not Reached Key Fibonacci Retracements Like Equity Indices Have
The Primary Chart at the top of this article shows the major retracement levels for BTC's entire bear-market decline. Note how BTC's 43% rally from June 2022 lows has still not meaningfully approached its .382 retracement level of its entire bear-market decline. By inference, if BTC hasn't been able to approach its lowest .382 retracement level, it has come nowhere near its .50 or .618 retracement levels, labeled on the Primary Chart above.
Supplementary Chart A below shows an example of one of the world's leading equity indices, the US S&P 500, having reached and even surpassed critical retracement levels in the powerful rally off June 2022 lows. Whether this rally is a bear rally or an actual trend reversal is hotly debated in the financial media, but the outcome remains uncertain despite confident forecasts in both directions.
More importantly, note how the S&P 500 (
SPX) has exceeded both its .382 retracement and its .50 retracement of its bear-market decline. In fact, it is approaching its .618 retracement of its YTD decline. When price closes in on a key level of multi-month importance, it often will find a way to touch that level given the magnetic effect it has.Supplementary Chart A: Two Key Fibonacci Retracement Levels for the YTD Decline in S&P 500 (
SPX500USD) Key Levels in Proximity to BTCUSD's Current Price
As shown in Supplementary Chart B, BTC has remained in a parallel channel off the June 17, 2022 lows. Some might argue this technically works as a bear flag pattern—confirmation would be a downward breakout that holds below the upward trendline forming the base of the channel.
In any event, this channel has contained price since mid-June 2022 lows. The return line (top line of the channel) lies near $25,700 to $26,282. This should prove to be strong resistance in the coming week. The lower line ranges from about $22,200 to $23,100, which should prove to be support—and given that the downtrend line remains intact, this should also be watched for a break.
The .382 retracement of the second leg of this bear market lies at $29,297. If BTC can break above its downward trendline—indeed, this would be a feat should it occur—the .382 should then also be watched to determine how price responds. This should serve as decent resistance at least on any initial attempt to push above it. but traders and market watchers should remain open-minded and flexible to see whether BTC could break above this level as equity indices have done. With FOMC minutes being published Wednesday
Supplementary Chart B: BTCUSD's Down Trendline and Fibonacci Retracements for the Second Leg of This Bear-Market Decline Starting at March 28, 2022, Swing Highs
Ichimoku Cloud Remains Bearish with a Hint of a Change
The Ichimoku Cloud can sometimes offer an additional perspective. The cloud remains bearish—red and downward sloping. (The mechanics of the cloud's color changes are beyond the scope of this article.) The could twists and turns green, however, in late August 2022 / early September 2022. Such cloud formations can suggest the potential for a shift in trend—but no guarantee.
Currently, price is meeting powerful resistance along the upper edge of the cloud's SSB (Senkou Span B) line. See Supplementary Chart C (below). This line works as resistance from about $24,700 to $25,000. This SSB line represents the mid-point of a 52-day period on the daily chart. Several candles have touched, briefly pierced, and then failed back below this key level. This shows that the level is holding a strong resistance for now.
Supplementary Chart C: BTCUSD's Ichimoku Cloud Chart on the Daily Time Frame
The weekly Ichimoku Chart remains more bearish in appearance. The cloud remains thick and red with no trace of a bullish twist in the future that could imply a possibility for clear skies ahead for BTC. The weekly chart also shows price significantly below the cloud, and even well below the Kijun line (blue), while having risen above the Tenkan line (gold). See Supplementary Chart D (below).
Supplementary Chart D: BTCUSD's Ichimoku Cloud Chart on the Weekly Time Frame
The author has no open position at the time of publication (August 17, 2022) on BTCUSD or BTC-related investment products such as BTC futures, BTC ETFs (BITO) or BTC derivatives.
This article is intended to present a relatively unbiased technical analysis of BTC's
DISCLAIMER: This post is published solely for educational / entertainment purposes and does not constitute financial advice or an investment recommendation and cannot account for any person's particular financial circumstances. The author would not want other investors / traders to lose money by relying *solely* on this idea rather than doing their own due diligence. Before entering any trade, please evaluate the risks of (i) the instrument / security being traded, (ii) the type of trade and its timeframe, (iii) risks inherent in that type of trade and its time frame, (iv) the inherent risks of shorting securities (presenting unlimited risk without hard stops in place), (v) the inherent risks of trading options, leveraged ETFs, and cryptocurrencies, and (vi) all financial risks arising each person's personal financial circumstances.
BTC1!BTCUSDBTCUSDBTCUSDTBITOUSDSPXSPX500USDSP500Note
Correction: The Primary Chart shows the parallel channel that has contained BTC's price since June 2022 lows (this is not shown in Supplementary Chart B)Note
It does not appear that BTC has reached the down trendline which was discussed as possibility. This down trendline remains intact, and the the parallel channel that contained price for nearly two months has now been violated and broken. This does not preclude BTC from a retest, however of the parallel channel. With the choppy action this year, it still seems reasonable to expect a tag of the downward trendline as well going back to November 2021.
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