Bitcoin - Brace for another 30% decline!
Over the past week, the situation in the cryptocurrency market has not changed much. The price of Bitcoin continued to be choppy, trading mostly between 22 000 USD and 24 000 USD. The inability of BTCUSD to break above the immediate resistance hints at even more weakening bullish momentum. Indeed, the same is implied by several technical indicators and the presence of low volume.
In addition to that, bearish fundamental factors continue to persist. We view higher interest rates and economic tightening as two main elements driving the U.S. economy into a deeper recession toward the end of 2022, and during 2023. Since such periods are accompanied by risk-off sentiment, we expect this to negatively affect the price of BTC, resulting in a new low over time.
Therefore, we still maintain a bearish view on Bitcoin with the price target of 17 500 USD, which is our medium-term price target. However, today, we would also like to set a new long-term price target at 15 000 USD.
Illustration 1.01
The illustration above shows the daily chart of BTCUSD during the downtrend in 2017/2018. Bear market rallies are indicated by green dashed lines. The picture illustrates how big moves up can occur during the bear market rally when people flock into the market chasing the asset because of so-called “FOMO - fear of missing out”. As we previously stated, Bitcoin is up approximately 40% from its lows, however, it does not mean that the trend of higher degree has changed to bullish.
Technical analysis - daily time frame
RSI is neutral. MACD lost momentum and strives to reverse to the downside. Stochastic turned bearish. DM+ and DM- are bullish, however, the trend is very weak. Overall, the daily time frame is neutral.
Illustration 1.02
Due to the choppy price action of BTCUSD, the setup we introduced recently remains valid.
Technical analysis - weekly time frame
RSI, MACD, and Stochastic are neutral. 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.
In addition to that, bearish fundamental factors continue to persist. We view higher interest rates and economic tightening as two main elements driving the U.S. economy into a deeper recession toward the end of 2022, and during 2023. Since such periods are accompanied by risk-off sentiment, we expect this to negatively affect the price of BTC, resulting in a new low over time.
Therefore, we still maintain a bearish view on Bitcoin with the price target of 17 500 USD, which is our medium-term price target. However, today, we would also like to set a new long-term price target at 15 000 USD.
Illustration 1.01
The illustration above shows the daily chart of BTCUSD during the downtrend in 2017/2018. Bear market rallies are indicated by green dashed lines. The picture illustrates how big moves up can occur during the bear market rally when people flock into the market chasing the asset because of so-called “FOMO - fear of missing out”. As we previously stated, Bitcoin is up approximately 40% from its lows, however, it does not mean that the trend of higher degree has changed to bullish.
Technical analysis - daily time frame
RSI is neutral. MACD lost momentum and strives to reverse to the downside. Stochastic turned bearish. DM+ and DM- are bullish, however, the trend is very weak. Overall, the daily time frame is neutral.
Illustration 1.02
Due to the choppy price action of BTCUSD, the setup we introduced recently remains valid.
Technical analysis - weekly time frame
RSI, MACD, and Stochastic are neutral. 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.
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