New blow for the king of cryptos! – The bad news is piling up for the price of Bitcoin (BTC). Indeed, it has just made a stealthy foray below $20,000 following the collapse of SVB Financial Group before getting back on its feet. At the same time, the US stock indices, the S&P 500 and the Nasdaq Composite are showing signs of weakness. With a finance sector having had its worst week since June 2022.
Since February 21, the latest technical analyzes of BTC are hardly reassuring. The bulls are confused as the gains at the start of the year gradually fade. Especially since the Fed’s pivot could be largely compromised. Because precisely, inflation in the United States is struggling to fall rapidly below acceptable standards for households and businesses.
In a market context that has darkened somewhat, let’s see the different scenarios that the king of cryptos offers us in the days/weeks to come.
Bitcoin in weekly units – Back towards $20,000
Following the thunderclap of SVB Financial Group, Bitcoin makes a bad copy for the third week in a row. Except that this time, we are seriously moving away from a neutralization of its bear run since its last ATH in November 2021and therefore of a reintegration of the courses inside the Kumo (Cloud of Ichimoku).
First, the bulls are being ejected heavily below the resistance of $26,000. Secondly, the king of cryptos is now at the contact of $20,000, and is trying to stay painfully above the Kijun. And lately, crossing the downline is likely to be compromised.
The fact that we are now in contact with $20,000 still validates the status quo of the price of BTC and the Chikou Span under the Kumo (Ichimoku cloud). As long as these two simultaneous situations persist, we constantly repeat that the risks of a new wave of correction remain relevant.
Assuming a breakout of the $20,000 and Kijun next week, we could cancel all the gains from the rebound at the start of the year if the price of Bitcoin had the bad idea to head towards $16,000. In which case, the balance of power would be reversed in favor of the bears. A further bearish extension below last year’s lows would revive the bear run recovery scenario.
Conversely, it would absolutely take a throwback at $20,000 to stop the consolidation of the last few weeks. But given the recent string of bad news that has probably cast doubt on many investors, it would be a financial utopia to return quickly towards $26,000.
>> 10% reduction on your trading fees? Sign up on Binance (commercial link) <<
Bitcoin in daily units – Big rout below $22,000
The last two sessions on Thursday and Friday have been relatively rough for the king of cryptos. In effect, he abruptly dropped the $22,000 to the point that we are now witnessing an unfavorable polarity change, i.e. a move from support to resistance. At the same time, the current price position is not so trivial in daily units. Because precisely, they are at the limit of the lower limit of the Kumo, the Senkou Span B (SSB). This could explain the bulls’ desperate reaction to preserve the $20,000.
We may see an excess on the sale in view of the significant bearish difference between the prices and the Tenkan. Even a partial fill would allow the king of cryptos to return to a neutral situation inside the Kumo with a small margin of safety compared to the SSB.
Nevertheless and taking into account the break of the $22,000, a jump would eventually lead us to a pullback below the former support. And if the chartist logic were to be respected, this signal would cause a new bearish impulse towards $18,000. And presumably $16,000 which would certainly demoralize the bulls. Thus, we would confirm a Bitcoin price and a Chikou Span below the Kumo in daily units.
In summary, Bitcoin is going through a complicated phase on two counts. Not only, by breaking down $22,000, the hope of a neutralization of its bear run since its last ATH in November 2021 is dwindling. But worse, Bitcoin largely annihilates its favorable momentum at the start of the year. Actions around $20,000 will give us further indications of the trend to come.
Next week is likely to be lively on all risky asset classes. On March 14 and 15, we will know respectively the latest inflation figures and the producer price index in the United States. If they turn out to be in line with previous months, the Fed could settle for a rate hike of 25 basis points. And at the same time, Bitcoin could have a good blow by avoiding a stampede below $20,000.
Conversely, an upsurge in inflationary pressures would prompt the US central bank to raise the tone of its monetary tightening. The probability of a 50 basis point hike in key rates would gain ground. With the successive debacles of Silvergate and SVB Financial Group, beware of an explosive cocktail that could take the king of cryptos to a high-risk zone.
wait no longer for you create an account on Binance. You will save 10% on your trading fees by following this link (trading link).