Another demoralizing week for the king of cryptos! – Cryptocurrency investors were eagerly awaiting the FED at its last meeting. It is clear that they will have a heavy heart in the end. Because if at first, Bitcoin (BTC) reacted well to the announcements of monetary tightening and the measured words of Jerome Powell. It turned completely lower before the opening of Wall Street on Thursday. In fact, certain economic statistics in the United States suggest that the inflationary peak is far from over.
And it is still in this dull context on the financial markets that the prices of the king of cryptos are at the limit of their low points for the year. But beyond that, new unfavorable technical signals appear at the risk of endangering an already undecided trend. As such, we could unfortunately revisit depths that were unimaginable just a month ago.
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Bitcoin – Prices moving away from Kumo in weekly units but not only
It’s a week that makes us see all the colors, whether it’s up at the start and then down at the end. If the situation remains frozen at this precise moment, Bitcoin would conclude a fifth week in the red. And since bad news never comes alone, chances are that the $38,000 support will soon be a thing of the past. Obviously, I conceive that it is not pretty to see. But the reality of the financial markets is such that we have to accept it, rightly or wrongly.
Especially since the prices currently quoted and the Ichimoku curves do not mix well, if I had to drive the point home. Firstly, BTC prices move away from the Kumo (cloud). And on the other hand, the Chikou Span is currently overflowing the bottom of the cloud, the Senkou Span B (SSB). Ultimately, the bullish cycle since 2019 punctuated by an uncertain trend since its last ATH in November 2021 would be on the way to being neutralized.
In the event that the breakout of the $38,000 support is confirmed next week, we will have to admit it will smell scorched regarding the next support at $34,000-35,000. And I would even say that the shoulder-head-shoulder (ETE) is a chart pattern that the majority of cryptocurrency investors should not have looked down on.
Bitcoin – The threat is becoming clearer below $35,000 and soon the return of $30,000?
Unthinkable at the start of April, Bitcoin took quite a hit to such an extent that the daily chart does not bode well, at least from a short-term perspective. Not only are prices and Ichimoku curves gradually slipping, but even worse the support of $35,000 ($34,000-35,000 on the chart) would be practically within reach.
With BTC prices and a Chikou Span simultaneously below Kumo, the likelihood of this market scenario would only increase. Even worse, the descending line born from the last failure to date below the resistance of $46,000 could weigh psychologically on buyers in the days/weeks to come.
This is why the $35,000 support should or should be watched carefully. Because in the event of a pure and simple rupture of this major level, revisiting last summer’s lows around $30,000 could agitate the entire cryptocurrency community.
In summary, Bitcoin is now on the razor’s edge, as its uncertain trend since its last ATH in November could risk going into a bear run, if the support at $35,000 is defeated. And even if the king of cryptos then did everything possible to resist, its strong correlation to financial stress would prevent it from asserting the assets it has claimed since its creation.
We will wonder if, in the end, a sweep below $35,000 or $30,000 in return for a crash on the equity indices would not be beneficial. While obviously in the short term, this would lead to heavy losses for investors, in the longer term, a decorrelation between BTC and equity indices could emerge. In which case the king of cryptos would protect against second-round inflation in the same way as tangible assets (commodities, real estate, agricultural and forest land, etc.).
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