It is probably useless to draw you a picture concerning the Russian invasion in Ukraine. Bitcoin (BTC) experienced a serious air pocket when Vladimir Putin officially launched the first hostilities. We believed the worst when it got closer to its recent lows from last January. But during the American session of this Thursday, February 24, 2022, which will remain engraved in our memories, the king of cryptos recovered all of the losses of the day.
This reversal of the situation is explained by the assumption that the FED would moderate its monetary tightening given the potential risks of the geopolitical conflict between Russia and Ukraine. Now, Bitcoin finds itself at a crossroads between hope for a rebound and fear of a relapse back to last summer’s demons. The weekly and daily technical analyzes testify to this hesitation on the next price movements of BTC.
This Bitcoin price analysis is brought to you in collaboration with the Coin Trading and its algorithmic trading solution finally accessible to individuals.
Bitcoin inside the Kumo in weekly units, but by little
If we leave it at that, Bitcoin could miraculously end a positive week. Given the magnitude of the geopolitical conflict, it could be that the Fed’s rate hike next March will be less significant. The current weekly candle would be forming a hammer (orange dot).
As a reminder, a hammer is a candle having a small body (or in the shape of a square) with a low wick which is clearly superior to it, ideally twice its size. This configuration occurs after several sessions of decline. The color of the candle doesn’t really matter, as the low wick signals that the sellers are starting to come under pressure to the point of buying back part of their position.
This hammer falls on time, because it keeps the bitcoin inside the Kumo (cloud) in weekly units. Enough to avoid the cold sweats of a beginning of questioning of the underlying trend since the low points of March 2020. However, BTC prices remain under pressure. Firstly, they are respectively below the Tenkan and the Kijun. On the other hand, the Chikou Spanthe centerpiece of Ichimoku, penetrates inside the cloud for the first time since January 27, 2020 (green dot). Which would lead us to a neutralization of the bullish cycle that had taken shape during the year 2019, in case Bitcoin does not recover quickly.
The fact that the king of cryptos manages to stay afloat above the SSB, the upper limit of the Kumo, gives us a glimpse of the first signs of stability unless Russia plays its part again in Ukraine.
A short-term flashback?
At the start of the week, Bitcoin fell below Kumo. On the day of the Russian invasion of Ukraine, it was very close to seeing its lows from last January. At the start of this weekend, it bounced spectacularly inside the cloud. Nevertheless, BTC prices are now in the hard because they are currently stumbling below the Kijun and $41,000 respectively which are at the level of the neck line of the shoulder-head-shoulder (ETE).
To hope that this rebound will gain momentum, it would be necessary to successively cross the neck line of the ETE around $41,000 and go back above the Kumo, in order to put in parenthesis the bearish momentum of Bitcoin since its last ATH close to $69,000. But at the same time, the Chikou Span would still remain under the Kumo. Thus, we are still a long way from considering a new bull run. Even though it is preferable that the crossing of the resistance around $46,000 takes place gradually in less volatile market conditions. This would have a better fundamental meaning vis-à-vis investors seeking diversification.
In summary, very smart whoever manages to anticipate what will happen on Bitcoin in the coming days. For me, buying at the sound of the cannon could be tempting if we rely on the evolution of the S&P 500 index in the face of previous geopolitical conflicts. As the king of cryptos is a risk aversion friendly asset, a cheap entry point would be on the way
However, investors should probably rather wisely wait for technical signals that would indicate a favorable trend reversal. In weekly units, BTC prices would do well to break out of Kumo from above. And de facto see the Chikou Span move away from it. The resistance around $51,000-52,000 would thus be the critical zone to cross if we want to move to the right side of the trend. Given that this Russian-Ukrainian conflict risks fueling inflationary pressures and impacting economic growth, there is also a chance that the FED and the ECB will once again become flexible on monetary tightening. As a result, Bitcoin would do well… to everyone’s surprise.
Is it possible to be gwinner every time? Whether the Bitcoin price is in great shape, or going through turbulence, Coin Trading offers you to increase your chances of success. Indeed, Trading Du Coin allows individuals to access an algorithmic and 100% automated trading tool. A real trend mechanism, this tool has been designed to adapt to market reversals and position itself on the most dynamic crypto assets of the moment.