The tide is turning

12 Eyl 2023

Yesterday, Bitcoin broke below $25,000, and in the process, it moved closer to a critical support level of $24,756 (before rebounding toward $26,000 overnight); if this support level is broken to the downside, it will mark a new low since 15th June 2023 and strengthen a bearish case in the short and medium term. Furthermore, if successful, we expect the breakout to coincide with MACD falling below the midpoint on the weekly chart. That would be yet another bearish development, confirming the downtrend and possibly foreshadowing a further breakdown in the price of Bitcoin (likely to $20,000 and potentially even lower). In accordance with our warnings since late last year, we may finally see an end to the most deceitful bear market rally and cryptocurrencies erasing all of their gains from the last twelve months. We continue to be bearish and expect Bitcoin to drop to around $24,000 in the short term and eventually revisit its last year’s lows.

Our views are based on multiple factors, including a lack of buying activity among large speculators (out of the futures market) and the FTX’s sale of tokens in the coming weeks. According to news outlets, the former second-largest crypto exchange will liquidate $3.4 billion worth of tokens. The proposed plan will allow the exchange to sell up to $100 worth of tokens per week (with the possibility of doubling the limit to $200 million per week); the Delaware Bankruptcy Court is supposed to decide on this matter tomorrow.

Now, on the topic of Bitcoin Spot ETF in the United States. In our opinion, its approval is inevitable. However, we would like to point out that recently, when there was any news in regard to this product in the United States, Bitcoin initially jumped higher but gave up profits later. That leads us to conclude that hype may fade by the time the new product gets approved, and the whole situation will turn into a well-known “buy the rumor, sell the fact.” Indeed, that happened when the first Bitcoin Spot ETF was approved in Europe last month, and Bitcoin dropped from around $29,000 to $26,000.

Illustration 1.01

The picture above shows the weekly chart of BTCUSD and MACD. The yellow arrow indicates a looming bearish crossover through the midpoint. If successful, the crossover will confirm the reversal of a higher-degree trend. As such, it will be a highly bearish development, likely foreshadowing Bitcoin’s fall below $20,000.

Technical analysis gauge
Daily time frame = Neutral
Weekly time frame = Bearish
*The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of RSI, MACD, Stochastic, DM+-, ADX, and moving averages.

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.

12 Eyl 2023

Not

Illustration 1.02

For us to start questioning the bearish thesis about the continuation lower, we would like to see Bitcoin break above $26,429 and then $26,800. In addition to that, we want to see RSI, MACD, and Stochastic rise on the daily chart.

13 Eyl 2023

Not

Today, we want to draw attention to three things. First, the CPI print in the U.S. is expected to come in hot, which might initially elevate the price of gold and crypto (though, they might be later dragged down with the stock market). Second, there is a bullish divergence taking place on the daily time frame, affecting RSI, MACD, and Stochastic. Third, the data from LookIntoBTC shows the number of Bitcoin addresses with 1,000 BTC or more in the balance continues to trend flat (suggesting that large speculators are waiting on the sidelines).

13 Eyl 2023

Not

The FTX exchange obtained approval to liquidate its stash of tokens.