Bitcoin - Selling pressure resumes
Updated
Bitcoin fell approximately 14% since our last update in which we boldly stated BTCUSD would not reach a new all time high in 2022. We pointed out that the price of Bitcoin retraced towards its 50-day Simple Moving Average which represented a correction of the downtrend, seeing the price bounce back to 45 850 USD. We also stated that the volume kept falling while the price kept rising which suggested new buyers were increasingly harder to find. This eventually resulted in the price meltdown and BTCUSD fell below 40 000 USD; subsequently, BTCUSD reached both our price targets. We continue to be bearish on Bitcoin and because of that we would like to set a new short-term price target to 37 500 USD and medium-term price target to 35 000 USD. Our view is supported by a bearish fundamental and technical outlook. As in the past, we still think the interest rate hike that is coming next month poses a substantial threat to further rise of cryptocurrencies. Actually, we think the tightening cycle in the U.S. is very bearish for Bitcoin and it will ultimately result in the price drifting lower. In addition to that, the current weakness in the general stock market also poses a threat to BTCUSD.
Illustration 1.01
Picture above depicts the daily chart of NQ1! (Nasdaq 100 index continuous futures). The yellow circle indicates the area that shows high similarity in the structure of candles to BTCUSD. This is also observable on the daily chart of SPX. It shows high positive correlation between Bitcoin, S&P 500 index and Nasdaq 100 index.
Technical analysis - daily time frame
RSI and Stochastic are bearish. MACD is in the bullish area, however, it started to flatten and reverse which is very bearish. DM+ and DM- performed bearish crossover recently. ADX undergoes reset. Overall, the daily time frame is very bearish.
Illustration 1.02
Just a while ago we predicted that cryptocurrencies would see capital outflows while gold would see capital inflows. This has proved to be the correct call as gold has resumed the bullish trend recently. Indeed, this week gold saw the biggest volume increase since June 2013. We think this phenomenon will strengthen in the short-term and medium-term future.
Technical analysis - weekly time frame
RSI, MACD and Stochastic are all bearish. DM+ and DM- are bearish too. ADX contains relatively low value which suggests the current trend of higher degree is very weak. Overall, the weekly time frame is bearish.
Support and resistance
Immediate support lies at 39 558.70 USD. Short-term support appears at 32 950.72 USD and short-term resistance sits at 45 850 USD. Resistance 1 is at 52 089.60 USD, Resistance 2 at 59 250 USD and Resistance 3 at 64 895.22 USD. Major resistance level sits at 69 000 USD meanwhile major support level can be found at 28 600 USD.
Please feel free to express your own 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. Your own due diligence is highly advised before entering trade.
Illustration 1.01
Picture above depicts the daily chart of NQ1! (Nasdaq 100 index continuous futures). The yellow circle indicates the area that shows high similarity in the structure of candles to BTCUSD. This is also observable on the daily chart of SPX. It shows high positive correlation between Bitcoin, S&P 500 index and Nasdaq 100 index.
Technical analysis - daily time frame
RSI and Stochastic are bearish. MACD is in the bullish area, however, it started to flatten and reverse which is very bearish. DM+ and DM- performed bearish crossover recently. ADX undergoes reset. Overall, the daily time frame is very bearish.
Illustration 1.02
Just a while ago we predicted that cryptocurrencies would see capital outflows while gold would see capital inflows. This has proved to be the correct call as gold has resumed the bullish trend recently. Indeed, this week gold saw the biggest volume increase since June 2013. We think this phenomenon will strengthen in the short-term and medium-term future.
Technical analysis - weekly time frame
RSI, MACD and Stochastic are all bearish. DM+ and DM- are bearish too. ADX contains relatively low value which suggests the current trend of higher degree is very weak. Overall, the weekly time frame is bearish.
Support and resistance
Immediate support lies at 39 558.70 USD. Short-term support appears at 32 950.72 USD and short-term resistance sits at 45 850 USD. Resistance 1 is at 52 089.60 USD, Resistance 2 at 59 250 USD and Resistance 3 at 64 895.22 USD. Major resistance level sits at 69 000 USD meanwhile major support level can be found at 28 600 USD.
Please feel free to express your own 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. Your own due diligence is highly advised before entering trade.
Trade closed: target reached
Our short-term price target of 37 500 USD has been reached. We would like to change medium-term price target of 35 000 USD to short-term price target.Trade closed: target reached
All our price targets have been reached.
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