BCH Outlook - Bearish Sentiment Price has successfully broken the 131.00 zone. We remain patient until price drops to 111.00. So far so good. We are in deep profits.
Tokens
BTCUSDT | ShortBitcoin price is in an important resistance zone. The two resistance areas that are in the way of Bitcoin could be an obstacle for the price to rise further. I do not give a signal to short and prefer to wait until the market volume improves on Monday.
be profitable🤑
Bitcoin - Breakout below 19 000 USD confirms our bearish thesisYesterday, Bitcoin dropped below the support level at 19 526 USD. Then later, the price continued below 19 000 USD, halting its movement at a low of 18 540 USD. These developments are negative for Bitcoin and further confirm the bearish thesis we laid out in our previous articles.
At the same time, there was no significant change in fundamental or technical factors, allowing us to stick to our bearish outlook and price targets at 17 500 USD and 15 000 USD. Although with mounting evidence of the global economy slowing down, we think the price of Bitcoin will drift far below our price targets. Indeed, we believe Bitcoin will test 10 000 USD in the coming months.
Despite that, we would first want to see our price targets being hit. After that, we will reassess the situation and set new price targets.
Illustration 1.01
Illustration 1.01 shows the 5-minute chart of BTCUSD. The yellow arrow indicates yesterday's quick price action that led to Bitcoin plunging below the 19 000 USD price tag.
Technical analysis - daily time frame
RSI, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the daily time frame.
Illustration 1.02
The chart above shows three bearish breakouts, which also confirm our bearish thesis. However, the most recent breakout was retraced; ideally, we want to see the price drop and stay below the immediate support/resistance.
Technical analysis - weekly time frame
RSI, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the weekly time frame.
Illustration 1.03
Illustration 1.03 shows the daily chart of BTCUSD. The yellow arrow indicates the spike in volume, which is another bearish development. Ideally, from here, we would like to see volume increase accompanying a declining price.
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.
Ripple - Once a promising cryptocurrency, down 90% from ATHRipple has been trading predominantly within the wide range for the past three months, indicating a neutral trend. Despite that, we remain bearish on XRPUSD and await it to drop below the short-term support over time.
Our notion is supported by a combination of fundamental and technical factors. However, the fact that this cryptocurrency is down approximately 90% from its all-time high also supports our view. Because of that, we would like to set the medium-term price target for XRPUSD at 0.30 USD and the long-term price target at 0.28 USD.
Illustration 1.01
Illustration 1.01 depicts the daily chart of XRPUSD and the conservative trade setup. The yellow rectangle indicates the wide range. The breakout above the short-term resistance will be bullish, while the breakout below the short-term will be bearish.
Technical analysis - daily time frame
RSI and MACD are neutral. Stochastic is slightly bullish. DM+ and DM- are perform whipsaws, and ADX contains a low value. Overall, the daily time frame is neutral, showing no price trend.
Illustration 1.02
The picture above shows the weekly chart of XRPUSD and two simple moving averages. These two moving averages, 20-week SMA and 50-week SMA, reflect bearish conditions.
Technical analysis - weekly time frame
RSI and Stochastic are neutral. MACD points to the upside but stays in the bearish area. DM+ and DM- are bearish. Overall, the weekly time frame remains 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.
Ethereum - "Uber-bullish merge" narrative is nonsense In our previous article, we dismissed nonsense about the “uber” bullish effect of the Merge on Ethereum. However, we also stated that we would not rule out a temporary bounce in the price while expecting it to have little to no effect on the overall trend direction. Today, we again stick to this narrative and remain bearish on ETHUSD.
We have no reason to change our bias as fundamental factors will continue to weigh on risk assets in the coming months. Additionally, technical indicators are worsening, which suggests more trouble ahead. Finally, as if it was not enough, a slowing global economy will lead to more risk aversion among assets like cryptocurrencies.
Due to that, we maintain our price targets for ETHUSD at 1 000 USD and 900 USD. Though, we have to note that we are growing increasingly bearish on the pair and expect it to drift below our price targets over time.
Illustration 1.01
Illustration 1.01 shows the most recent developments on the daily chart of ETHUSD. Yellow arrows indicate three bearish breakouts and one bullish retracement.
Technical analysis - daily time frame
RSI, Stochastic, DM+, and DM- are all bearish. MACD is neutral. Overall, the daily time frame is bearish.
Illustration 1.02
Illustration 1.02 shows the daily chart of ETHUSD and two simple moving averages. Yellow arrows indicate bullish and bearish crossovers. The current constellation of moving averages is bearish.
Technical analysis - weekly time frame
RSI, Stochastic, MACD, DM+, and DM- are all 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.
Ethereum - Wake up call is ringing!We have been warning about the unsustainable rally in the cryptocurrency market for a while now. Indeed, for several weeks, we have been pointing out bearish developments on the chart of Ethereum and Bitcoin. However, only a week ago, we proposed the idea that the bear market rally reached its peak, and, as if it was not enough, we also said a 50% decline was looming over Ethereum.
Today, we continue to stick to this assessment for Ethereum, which is mainly influenced by bearish fundamental factors like high-interest rates, quantitative tightening, and the prospect of a severe global recession. Due to the persistence of these factors, we have no reason to change our bearish medium-term and long-term views on the market.
For the short-term, we are growing increasingly bearish on ETHUSD. In the past 24 hours, Ethereum fell 8%, breaking below the immediate support and reaching bearish territory. This development is particularly bearish as it coincides with the RSI breaking below 70 points and other technical indicators turning bearish. Accordingly, we stick to our price target of 1 000 USD.
Illustration 1.01
In our previous idea, we said that ideally, we would like to see a drop in price accompanied by a build-up in volume to confirm our thesis; soon after that, a drop in price and a spike in volume occurred. Now, we would like to see more price decline and a further increase in volume. Ethereum is down approximately 15% from its recent peak.
Technical analysis - daily time frame
RSI, MACD, and Stochastic are all bearish. DM+ and DM- are due to perform bearish crossover, which will further bolster the bearish case for ETHUSD. Overall, the daily time frame is bearish.
Illustration 1.02
The setup we introduced recently remains valid. Indeed, the bearish signal was triggered when the price broke below the immediate support.
Technical analysis - weekly time frame
RSI is bearish. MACD points to the upside but stays in the bearish zone. Stochastic is bullish. DM+ and DM- are bearish. Overall, the weekly time frame is neutral.
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.
Ethereum - "FOMO" backfiringOn 15th August 2022, we proposed the idea of Ethereum being at the top of a bear market rally. Following our announcement, Ethereum erased more than 20% of its value within the following week. This move came as a blow to many market participants expecting the rally to continue toward the new ATH.
However, we have stressed for some time now that this would not be possible during 2022. Rather than that, we have said many times that the bear market would persist throughout the current year and likely during the next one.
Our assessment is based on fundamental and technical factors we explain below and in our previous ideas. Our price target for ETHUSD is 1 000 USD.
Illustration 1.01
Illustration 1.01 shows bearish breakouts that helped us to confirm our bearish thesis.
Technical analysis - daily time frame
RSI, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the daily time frame is bearish.
Technical analysis - weekly time frame
RSI, MACD, Stochastic, DM+, and DM- are all 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.
Bitcoin - Bear market rally top?Over the past few weeks, worsening economic data led to widespread speculation about the FED backtracking on its promises, leading to buying spree fueled mainly by retail investors calling for the market bottom and trend reversal. Despite mounting bullish calls, we stuck to a bearish outlook for the medium-term and long-term while pointing to a bear market rally in the short-term.
Recently, technical indicators started to show severe signs of exhaustion, with shallow volume accompanying new highs. This development suggests fewer market participants are willing to buy at current high prices, which is an ominous warning sign. Each breakout above the resistance at 24 280 USD was quickly invalidated. Additionally, RSI, MACD, and Stochastic are overbought on the daily time frame, potentially suggesting the top of the bear market rally.
As for the medium and long term, we have no reason to change our bearish outlook due to fundamental factors like higher interest rates, economic tightening, slowing global economy, and regulatory threats. Because of that, our medium-term price target is 17 500 USD, and our long-term price target is 15 000 USD.
Illustration 1.01
The picture above shows the setup we introduced (and kept updating) early in the bear market rally. Yellow arrows indicate bullish breakouts and the recent invalidation. Red arrows indicate volume declines accompanying bullish breakouts.
Technical analysis - daily time frame
RSI is overbought. MACD is flattening. Stochastic is bearish. DM+ and DM- are bullish. Overall, the daily time frame is neutral/slightly bearish.
Illustration 1.02
Many analysts argue that BTCUSD has bottomed out. However, Illustration 1.02 shows that even a bounce of such magnitude as +40% is nothing uncommon. For example, in February 2018, during the bear market rally, Bitcoin gained over 98% within a mere month.
Technical analysis - weekly time frame
RSI is flattening. MACD and Stochastic are bullish but still in the bearish zone. DM+ and DM- stay bearish. Overall, the weekly time frame is neutral.
Illustration 1.03
The picture above shows further evidence of a gradual decline in volume.
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.
$op/usdt short term bearish, long term bullish. good fundamentals and currently in a downtrend, though in a fallen wedge, which go to upside about 68% of the time. currently waiting for a good entry for a long, $btc is currently dictating the market as well as the $dxy.
Ethereum - 50% decline loomingSimilarly, like in the case of Bitcoin, we also remain bearish on Ethereum. Indeed, we still maintain our price target of 1000 USD per coin. Our views are based on technical and fundamental factors detailed below and in the previous articles.
Illustration 1.01
Illustration 1.01 shows the updated setup for ETHUSD with the bearish trigger below the immediate support.
Technical analysis - daily time frame
RSI left the overbought territory, which is bearish. MACD is flattening. Stochastic is bearish. DM+ and DM- are bullish. Overall, the daily time frame is neutral/slightly bearish.
Illustration 1.02
Volume continues to decline, which is bearish.
Technical analysis - weekly time frame
RSI is neutral. MACD and Stochastic are bullish. DM+ and DM- are bearish. Overall, the weekly time frame is slightly bullish.
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.
Ethereum - Raging bull market?! Is it, really?!In our previous idea, we argued Ethereum reached a potential top of the bear market rally. However, we remain cautious until we see more signs to confirm our assessment.
Our view is based upon bearish fundamental factors that will persist throughout 2022 and 2023, dragging the global economy into recession and causing risk-off sentiment. In our opinion, the drying up liquidity in the cryptocurrency market suggests trouble ahead, with volumes being low compared to where they were during previous bull markets. Additionally, several technical indicators flash overbought conditions for ETHUSD.
As if it was not enough, the market sentiment reflects raging “bull market euphoria” among retail investors, with many forgetting how deceitful bear market rallies tend to be. Mounting calls for the trend reversal, and new ATH point to the classic irrationality of market participants during such periods.
These developments worry us and, indeed, they lead us to speculate that the looming selloff will have extreme nature. Therefore, we maintain a bearish outlook on Ethereum. Accordingly, we stick to our price target of 1 000 USD.
Illustration 1.01
The picture above shows the daily chart of ETHUSD. The red arrow indicates a gradual decline in volume over the past three days. To confirm our previous assessment about the potential top, we would like to see a build-up in volume accompanying a price decline. So far, we have not seen that. Another development we would like to see is a breakout below the sloping support and the immediate support. That would bolster a bearish case for Ethereum.
Technical analysis - daily time frame
RSI crossed below 70 points, which is bearish; however, it is turning neutral. MACD is due to perform a bearish crossover. Stochastic is bearish. DM+ and DM- are bearish. Overall, the daily time frame is neutral/slightly bearish.
Illustration 1.02
Illustration 1.02 shows the magnitude of bear market rallies during the bear market of 2018.
Technical analysis - weekly time frame
Stochastic is bullish. RSI is flattening. MACD is bullish. DM+ and DM- are bearish. Overall, the weekly time frame is neutral.
Illustration 1.03
The setup we introduced in the previous idea remains valid.
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.
Bitcoin - The ultimate warning!In yet another perplexing move, cryptocurrencies jumped higher after yesterday's CPI print in the United States. Better than expected results sparked a wave of buying among retail investors pumping the price of Bitcoin above the immediate support/resistance and simultaneously into the bullish zone. However, we think this recent move perfectly shows how irrational markets can become despite mounting evidence that the world will be driven into a deeper recession toward the end of 2022.
In our opinion, the narrative that the FED will step in, cut interest rates and start printing money to avoid recession is wrong. Indeed, we think this narrative is one of the leading causes of the current rally (with technical factors also strongly contributing). Unfortunately, we believe the FED is left with no choice but to increase interest rates to fight inflation. However, by doing that, the FED will risk causing more systemic problems in the stock and cryptocurrency markets.
Therefore, we stick to our bearish outlook when looking beyond the rally. Accordingly, we maintain a medium-term price target of 17 500 USD and a long-term price target of 15 000 USD. For the short-term, we are looking at 26 500 USD with the invalidation level at 24 280 USD.
Illustration 1.01
Illustration 1.01 shows the daily chart of BTCUSD and the trade setup we introduced recently. Simple support and resistance lines are derived from prior peaks and troughs. The yellow arrow indicates the bullish breakout. We stick to our previous assessment of the upside for Bitcoin, which is 26 500 USD in the short term (invalidated if a retracement occurs); however, we will again pay close attention to volume levels.
Technical analysis - daily time frame
RSI, Stochastic, and MACD turned bullish. However, they show exhaustion, which may imply the ultimate bull trap above the immediate support/resistance. DM+ and DM- are bullish. Overall, the daily time frame turned bullish. Despite that, we voice caution.
Illustration 1.02
The picture above shows previous and current bear market rallies. The magnitude of moves is measured from the low to the high. The current rally falls into the range of the earlier downtrend corrections.
Technical analysis - weekly time frame
RSI, MACD, and Stochastic are slightly bullish. DM+ and DM- are bearish. Overall, the weekly time frame is neutral/slightly bullish.
Illustration 1.03
The illustration above shows previous bullish breakouts and what happened to volume after they occurred. For the bearish scenario and invalidation of the breakout, ideally, we would like to see the same development occur this time again.
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.
Bitcoin - Investors continue their chase for the higher priceSince its lows on 18 June 2022, Bitcoin has risen approximately 40%. However, despite that, we remain committed to our bearish stance, which is mainly affected by persisting fundamental factors that will continue to weigh on the cryptocurrency market for the rest of 2022 and 2023.
Despite that, the current trade setup still allows for a further price rise in the short-term; especially, if Bitcoin breaks above the immediate resistance. Under such conditions, we would see the upside up to 26 500 USD, and in an extreme scenario near 32 500US; which remains consistent with what we stated already several weeks ago.
In regard to our price target, it stays at 17 500 USD.
Illustration 1.01
Illustration 1.01 shows the upward sloping channel, which many analysts say is bullish and indicative of the trend reversal. However, in our opinion, there are several warning signs on the chart. First, volume declines throughout the structure. Second, each breakout above the immediate resistance was followed by strong selling pressure. Third, overall volume levels remain very low.
Technical analysis - daily time frame
RSI and MACD are neutral/slightly bullish. Stochastic is bullish. DM+ and DM- are bullish. Overall, the daily time frame is neutral/slightly bullish.
Illustration 1.02
The setup which we introduced previously remains valid; that is mainly due to the choppy price action of Bitcoin, which continues to oscillate within the wide range with occasional breakouts above it.
Technical analysis - weekly time frame
RSI and Stochastic are slightly bullish. MACD performed bullish crossover, however, it stays in the bearish area. DM+ and DM- are bearish. Overall, the weekly time frame is neutral/slightly bullish.
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.
Bitcoin - Deceitful rally 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.
Bitcoin - Rip or dip The setup we introduced recently remains valid. We will have our eyes on the FOMC meeting today. We expect volatility to be elevated throughout the day. We will update the idea after the FED decision.
Our thoughts are detailed in the attached ideas.
Technical analysis - daily time frame
RSI paused its fall and became neutral. MACD is also neutral. Stochastic is bearish. DM+ and DM- are also bearish. Overall, the daily time frame is bearish.
Illustration 1.01
We showed the chart above before. Structurally, Bitcoin continues to develop like during prior corrections of the current downtrend.
Technical analysis - weekly time frame
RSI strives to reverse to the downside. MACD is neutral. Stochastic is bearish. 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.
Ethereum - The rally loses momentum quickly Recently, we expressed our lack of belief in the Ethereum price rally. Indeed, when it traded between 1500 and 1600 USD, we stated the price started to appear attractive again for the short position re-entry (accompanied by tight-stop loss).
Since then, Ethereum stalled and dropped approximately 7%. Nevertheless, we continue to be bearish on the pair as we foresee threats from fundamental and technical factors.
Accordingly, we would like to set the price target for ETHUSD at 1000 USD. However, our bias will be invalidated if the price retraces above its recent high at 1 663.53 USD.
Technical analysis - daily time frame
RSI, MACD, and Stochastic turned bearish. DM+ and DM- are due to perform bearish crossover. Overall, the daily time frame is bearish.
Illustration 1.01
We are looking for the bearish retracement below the immediate support level. These developments are structurally similar to BTCUSD. That will further confirm our bearish thesis.
Technical analysis - weekly time frame
The RSI stalls. The Stochastic points to the upside but stays in the lower area. The MACD is neutral. 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.
Bitcoin - Does turbulence lie ahead? In the past few weeks, we reiterated our lack of belief in the trend reversal in Bitcoin. We said the price bounce would be temporary and that it was too premature to call the bottom. Additionally, we stuck to a short-term bullish call and medium/long-term bearish call. Furthermore, we also hinted at signs of weakness that led to the inability of BTCUSD to continue higher.
Among these developments, we also hinted at structural problems in the cryptocurrency market. These also remain today with the latest addition of Coinbase to troubled companies in the sector (due to alleged investigation). Threats from higher interest rates, economic tightening, and global recession also continue to persist.
With these new developments in the market, we turned bearish on Bitcoin in the short term. That is mainly due to Bitcoin retracing below 21 868 USD. We said that such development would be bearish in the setup we introduced in our latest idea. Accordingly, we stick to what we said. However, if the immediate resistance/support is broken to the upside, it will cause us to turn bullish again. Because of that, tight stop-losses should accompany trade entries.
*The FED meeting is scheduled for Wednesday. We will be very cautious as the FED is expected to raise interest rates and further worsen economic conditions.*
Illustration 1.01
Illustration 1.01 shows the daily chart of BTCUSD. It also shows the downward sloping channel. The upper bound connects two peaks and acts as the resistance; meanwhile, the lower bound is parallel to the upper bound and acts as the support.
Technical analysis - daily time frame
RSI and Stochastic turned bearish. DM+ and DM- performed bearish crossover. The MACD is neutral. The ADX contains a relatively low value which hints at a weak trend. Overall, the daily time frame is bearish.
Illustration 1.02
Recently, we hinted at the presence of low volume accompanying the breakout above 21 868 USD price tag. We noted that this was a sign of weakness, and if the volume stayed insufficient, then the market was due to reverse abruptly.
Technical analysis - weekly time frame
RSI, MACD, Stochastic, DM+, and DM- are all 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.
Bitcoin - Rally continues but restrictions on withdrawals too!In the previous post, we abandoned our bearish price targets as the trend turned neutral. We also noted that we saw short-term upside potential near 24 000 USD while still seeing medium/long-term downside potential coinciding with 2022 lows. Since then, Bitcoin bounced up and retraced above 20-day and 50-day SMAs, which hints at a powerful correction. Due to that, we will pay close attention to the volume. Any new peaks in the price accompanied by declining volume will raise caution to us.
Nevertheless, we currently foresee more upside potential for BTCUSD near the 26 500 USD price tag. Indeed, in extreme conditions (ones like in the Ethereum over the past week), BTCUSD could go as high as 32500. Although, at the moment, we doubt that will happen. Our rationale comes from the premise that the FED is expected to increase interest rates during its upcoming meeting, which will further slow down the U.S. economy. As a result, we view this as detrimental to the stock market and cryptocurrencies.
Due to that, we speculate that what we are currently seeing in the cryptocurrency market might potentially be the ultimate bull trap on the horizon. We draw this conclusion from mounting calls for the bottom and sky-high prices despite the prospect of a global recession; this sentiment does not align with what typically occurs when market participants capitulate. Additionally, a large magnitude of the moves up (also in the stock market) is reminiscent of a classic bear market rally rather than a bull market.
Illustration 1.01
The picture above shows the setup we showed in the previous post on BTCUSD, however, with adjusted support levels and bullish/bearish levels. Yellow arrows indicate the bullish breakout and retracement to the 50-day SMA.
The cascading effect
A few weeks ago, we warned investors that the Celsius Network restricted transfers of cryptocurrencies to its more than 1.7 million users holding approximately 151 000 Bitcoin in their frozen accounts. Back then, we noted that this was just the beginning of what would come later and what could potentially have a spillover effect. Shortly after that, the Celsius Network filed for Chapter 11 bankruptcy, leaving its clients uneasy. Meanwhile, several other financial institutions similar to the Celsius Network started to pause withdrawals or went bankrupt.
The list of affected companies:
Celsius Network
Voyager
CoinFlex
Sky-Bridge Capital (cryptocurrency fund)
These are just a few to name. However, these developments start to hint at structural problems in the cryptocurrency market. We expect more companies to be affected in the short-term/medium-term future. Because of that, we voice a word of caution.
Technical analysis - daily time frame
RSI, Stochastic, and MACD are all bullish. If MACD breaks above 0 points, then it will bolster the bullish case in the short term. The daily time frame is bullish.
Illustration 1.02
Long-term moving averages remain bearish.
Technical analysis - weekly time frame
RSI is bullish. MACD is bullish, however, in the bearish area. Stochastic oscillates in the bearish area while pointing to the upside, which is slightly bullish. Overall, the weekly time frame is slightly bullish/neutral.
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.
Coinbase - More downside is likelyThe downtrend in cryptocurrencies supports a bearish view on Coinbase, which is currently down more than 80% since it started to float on the public stock market just a few months ago. In our opinion, the company will continue to lose its value in the short-term and medium-term. Indeed, we think the recent fallout with the Luna stablecoin token and Celsius network will have a contagious effect that will eventually catch up with other industry giants and possibly also Coinbase. Due to that, we would like to set the price target for Coinbase at 50 USD.
Illustration 1.01
The picture above shows Coinbase stock trading within the wide range; interesting is that this trading range is structurally similar to the range observable in the price of Bitcoin and other cryptocurrencies.
Technical analysis - daily time frame
RSI, MACD, and Stochastic are slightly bullish. DM+ and DM- are neutral. Overall, the daily time frame is slightly bullish/neutral.
Illustration 1.02
Illustration 1.02 portrays similarities between the price action of BTCUSD and Coinbase.
Technical analysis - weekly time frame
RSI and Stochastic are bearish. MACD is neutral . 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.
Bitcoin - The trend turns neutralOver the past month, Bitcoin lost much of its bearish momentum; indeed, it became stuck within the wide range, oscillating from one side to another. Because of the trend turning neutral we were forced to abandon our price targets for the 2nd time. Currently, we stay out of the market and decide to observe it for a while before running to new conclusions. However, we have to note that fundamental bearish factors have not changed. The prospect of higher interest rates, economic tightening, and global crisis continue to threaten the cryptocurrency market. Because of that, we still think there is a high likelihood for BTCUSD to make a new low in 2022. Although, despite that, we think the general stock market and cryptocurrency sector might be positioning themselves for the significant bear market rally. At the moment, the upside potential for BTCUSD is near 24 000 USD, which coincides with the 50-day SMA. Meanwhile, the downside potential for BTCUSD in 2022 is near its recent lows.
Illustration 1.01
Two moving averages, 20-day SMA and 50-day SMA, still reflect the bearish trend. However, the 20-day SMA started to move sideways recently, hinting at loss of momentum and trend neutrality.
Technical analysis - daily time frame
Stochastic is neutral. MACD and RSI are bullish. DM+ and DM- are neutral. Overall, the daily time frame is neutral.
Illustration 1.02
Two moving averages, 20-week SMA and 50-week SMA, continue to suggest the presence of the bearish trend. However, the daily time frame hints at the trend turning neutral (in short-term/medium-term). Additionally, the cool-off in selling pressure is indicated by low volume.
Technical analysis - weekly time frame
RSI, MACD, Stochastic, DM+ and DM- remain bearish. Overall, the weekly time frame stays bearish; however, it is less bearish than a week ago.
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.
Ethereum - Bullish calls are falseWe maintain a bearish outlook on Ethereum. Accordingly, we also maintain our price targets of 900 USD and 800 USD. We have no reason to change our bias due to persistence of bearish fundamental and technical factors, which we detailed in our previous posts on ETHUSD.
Illustration 1.01
The picture above shows the weekly chart of ETHUSD. Two moving averages, 20-week SMA and 50-week SMA, continue to confirm the medium-term/long-term bearish trend.
Technical analysis - daily time frame
RSI, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the daily time frame is bearish.
Illustration 1.02
The picture above shows simple support and resistance levels for ETHUSD.
Technical analysis - weekly time frame
The weekly time frame coincides with the daily time frame. RSI, MACD, Stochastic, DM+, and DM- are all 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.
Bitcoin - Do not get fooled by bullish callsPersistence of bearish fundamental factors continues to support our bearish view on the cryptocurrency market. We expect more rate hikes (by the FED) and economic tightening to bolster the selloff in the general stock market. Subsequently, we expect that to drag the price of Bitcoin to new lows. The same picture is painted by technical factors, which point to more downside for Bitcoin. Accordingly, we maintain our price targets of 17 500 USD and 15 000 USD.
Illustration 1.01
The chart depicts Bitcoin trading at 2018 price level. The upper yellow dashed line connects peaks; the lower yellow dashed line is parallel to the upper line. Corrections of the downtrend are indicated by yellow arrows; it is observable that prior pauses in the selling pressure were followed by sideways moving price action. Subsequently, that was followed by a new low in the price of Bitcoin. At the moment, we observe the same development on the daily chart.
Technical analysis - daily time frame
RSI, Stochastic, DM+, DM- are all bearish. The MACD flattens. Overall, the daily time frame is bearish.
Illustration 1.02
The picture above shows simple support and resistance levels for BTCUSD.
Technical analysis - weekly time frame
RSI, Stochastic, MACD, DM+, DM- are all bearish. Overall, the weekly time frame remains bearish.
Illustration 1.03
The chart above shows the price of BTCUSD and volume. It can be seen that volume is at monthly lows over the past ten years. Although, in the past three months, as selloff progressed, volume picked up a little bit.
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.
Bitcoin - Still no sight of the uptrend Since the last Friday, Bitcoin rose about 600 USD to approximately 20 200 USD, where it currently trades. Nevertheless, we maintain a grim view of Bitcoin, mainly due to the persistence of bearish fundamental and technical factors. Accordingly, we stick to our price targets at 17 500 USD and 15 000 USD. Although, we would like to acknowledge that Bitcoin might continue to be choppy for a little longer before regaining momentum to the downside.
Illustration 1.01
The daily chart of BTCUSD shows retracements toward 20-day SMA. These retracements act as corrections of the downtrend. Therefore, we will pay close attention to the ability of the price to stay above/below the 20-day SMA (above is bullish, below is bearish). If the price holds above the SMA for an extended period, that may imply another price increase before the breakdown.
Technical analysis - daily time frame
RSI exited the oversold zone, which is slightly bullish. Stochastic is neutral. MACD is slightly bullish; however, it remains in the bearish area. DM+ and DM- remain bearish. Overall, the daily time frame is neutral.
Illustration 1.02
The chart shows simple support and resistance levels for BTCUSD.
Technical analysis - weekly time frame
RSI, MACD, Stochastic, DM+, and DM- are all 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.
