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.