Bitcoin market analysis
Updated
Hello traders!
Long time no see from me, but let’s catch up the market situation now. Before starting with the technical analysis I would like to summarize the overall market situation:
- War in Ukraine – two scenarios remaining. A decision and end in the next few days or a multi-month war like this in Syria, Iraq and Afghanistan. For me the first scenario is more likely, because of the sanctions against Russia. I don’t think their economy will last long in these conditions, yeah, I know, China, but I don’t think it will be easy for Putin to relocate all goods and services to Asia so fast.
- Wild traditional markets – who said crypto is the only volatile market? Paypal and Facebook are down 40% since January, Lukoil and Gazprom are down 80%, while the commodities are sky-rocketing with double digits per day. This definitely has a big impact in the crypto markets.
- Crypto – a safe heaven in a global financial crisis? Not yet. I really hope so, but for now there are really no signs for that
So what we have currently on the Bitcoin chart:
- Two big ranges. The first one marked with red dots - the 2021 bottom as support (29000$) and the 1 trillion BTC market cap line as resistance (53000$). The second one is the 2022 price action between 32000$ and 45000$, in which we are now.
- Broken downtrend line, but still no upside momentum. Yes, we broke the downtrend from the ATH (marked with an orange line on the chart), but as you clearly see this doesn’t form an uptrend, but a boring range. That’s not so bullish in my opinion.
- Bitcoin is still below all major technical MAs on the daily (50, 100 and 200) and the 21 weekly EMA, which is often mentioned as a bull/bear market border. All of them are place between 40000 and 48000$, which is in perfect alignment with all other horizontal resistance zones marked above. Once we break 50-53000$ you can long your savings, but for now – be very careful with high stakes longs.
I am a fan of the lengthening bull cycles theory, which means that the bottom is already in and this bull market top is still not in. Two scenarios ahead of us:
- Bullish scenario (in blue) – Bitcoin will finally break the resistances around 45000$ and will get in a new range between 45000 and 56000$ before skyrocketing to a new ATH around May-June. There are some potentially bullish news coming from SEC (let’s have finally a Bitcoin spot ETF). Companies reports for Q1 are coming also at the end of this month – why don’t we have Facebook or Amazon adding Bitcoin in their portfolio?
- Bearish scenario (in yellow) – unfortunately this is more likely to happen. I am not where will be the real bounce zone – at the 2021 bottom or at 32000$. Then the same structure to a new ATH later this year. Yes, I am pretty sure that we won’t see Bitcoin below 30000$.
In the short term I expect a lot of volatility – we closed the weekly with an inverted hammer, which is mostly a bullish pattern, but my indicator has flashed short on the daily so I am a bit confused how this will play out. Trade carefully and don’t risk more than 5% of your trading account in a single trade!
Not financial advice, of course!
Long time no see from me, but let’s catch up the market situation now. Before starting with the technical analysis I would like to summarize the overall market situation:
- War in Ukraine – two scenarios remaining. A decision and end in the next few days or a multi-month war like this in Syria, Iraq and Afghanistan. For me the first scenario is more likely, because of the sanctions against Russia. I don’t think their economy will last long in these conditions, yeah, I know, China, but I don’t think it will be easy for Putin to relocate all goods and services to Asia so fast.
- Wild traditional markets – who said crypto is the only volatile market? Paypal and Facebook are down 40% since January, Lukoil and Gazprom are down 80%, while the commodities are sky-rocketing with double digits per day. This definitely has a big impact in the crypto markets.
- Crypto – a safe heaven in a global financial crisis? Not yet. I really hope so, but for now there are really no signs for that
So what we have currently on the Bitcoin chart:
- Two big ranges. The first one marked with red dots - the 2021 bottom as support (29000$) and the 1 trillion BTC market cap line as resistance (53000$). The second one is the 2022 price action between 32000$ and 45000$, in which we are now.
- Broken downtrend line, but still no upside momentum. Yes, we broke the downtrend from the ATH (marked with an orange line on the chart), but as you clearly see this doesn’t form an uptrend, but a boring range. That’s not so bullish in my opinion.
- Bitcoin is still below all major technical MAs on the daily (50, 100 and 200) and the 21 weekly EMA, which is often mentioned as a bull/bear market border. All of them are place between 40000 and 48000$, which is in perfect alignment with all other horizontal resistance zones marked above. Once we break 50-53000$ you can long your savings, but for now – be very careful with high stakes longs.
I am a fan of the lengthening bull cycles theory, which means that the bottom is already in and this bull market top is still not in. Two scenarios ahead of us:
- Bullish scenario (in blue) – Bitcoin will finally break the resistances around 45000$ and will get in a new range between 45000 and 56000$ before skyrocketing to a new ATH around May-June. There are some potentially bullish news coming from SEC (let’s have finally a Bitcoin spot ETF). Companies reports for Q1 are coming also at the end of this month – why don’t we have Facebook or Amazon adding Bitcoin in their portfolio?
- Bearish scenario (in yellow) – unfortunately this is more likely to happen. I am not where will be the real bounce zone – at the 2021 bottom or at 32000$. Then the same structure to a new ATH later this year. Yes, I am pretty sure that we won’t see Bitcoin below 30000$.
In the short term I expect a lot of volatility – we closed the weekly with an inverted hammer, which is mostly a bullish pattern, but my indicator has flashed short on the daily so I am a bit confused how this will play out. Trade carefully and don’t risk more than 5% of your trading account in a single trade!
Not financial advice, of course!
Note
The blue scenario is in play. We are above 50 and 100MAs on the daily + very close to going through the so called "bull market line" 21EMA on the weekly. Good volumes and everything looks primed for the final phase of the bull market.
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