A technical rebound before new episodes of stress? – While a technical rebound on equity indices took shape during this week, we would have thought that Bitcoin (BTC) would do the same. Still, the crypto king remained perched around the $30,000 support. So much so that the idea of a beginning of divergence between the two asset classes is beginning to timidly take hold.
However, we must not lose sight that Bitcoin’s bear run since its last ATH in November 2021 is definitely validated. Whether or not it frustrates the egos of some, the manifestation of unfavorable technical signals is a probative exhibit until proven otherwise.
However in the short term, the possibility of an easing of the current uncertainties on the financial markets could lead us to a technical rebound of the BTC. Although the scenario is currently far from guaranteed, it would logically fit into the classic pattern of a secular downtrend. History to temporarily calm the sellers.
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Bitcoin – Nine in a row by the end of the weekend?
Bitcoin risks a ninth consecutive week of decline, an unprecedented situation since its existence. This sad all-time high would see a close slightly below the $30,000 support. But by analyzing the weekly chart closely, it seems possible to avoid a bright red tenth week. And this, thanks to the price position of BTC in relation to certain curves of the Ichimoku.
Despite BTC prices and a Chikou Span well below the Kumo (cloud), the gap between the former and the Tenkan begins to become excessive on the downside. On the other hand, the most volatile curve of the famous Japanese indicator has stabilized practically at the resistance level of $38,000. In this sense, these supportive but fragile technical signals could be an integral part of a technical rebound from the King of Cryptos. Without the bear run since its last ATH in November 2021 being called into question.
Assuming downside pressure subsides around the $30,000 support, Bitcoin would have the possibility of rallying the resistance of $35,000 and that of $38,000 respectively at the level of the weekly Tenkan. Then why not the last descending line that was born since the last failure to date below the resistance of $46,000.
Bitcoin – Difficult to Slice in Daily Units
If you like Norman’s answers, the daily chart unfortunately gives you that opportunity. In effect, Bitcoin prices seem to be sailing in a very narrow price zone around $30,000 and the Tenkan. This attests to the dithering of both short-term buyers and sellers as was the case last week.
With BTC prices and a Chikou Span away from Kumo, the fact remains that the bearish bias could win out. In addition, the significant thickness of future Kumo in daily units would potentially represent a major obstacle against a favorable trend reversal. In this case, the low points of the year of May 12 would be reviewed quickly. If by misfortune, the market context were to worsen, the shadow of the support of $20,000 would rebound in the minds of investors.
Conversely, we will limit the damage through a technical bounce that we evoked on the weekly chart. But the fact remains that the task promises to be tough given the simultaneous price developments of the king of cryptos and Ichimoku.
Now that Bitcoin’s bear run is underway, many investors should consider both of these options. Especially since the panic phase is not at its zenith. In the short term, a technical bounce could take place, because let’s not forget that short sellers are potential buyers. In the event of a significant upward movement at the slightest good news, we would see redemptions of short positions so that they can liquidate a large part of their profits.
However, in the longer term, new episodes of stress should be expected, accelerating the panic phase. Then eventually, the capitulation phase could send BTC prices back to previous levels that triggered the last bull run. Not only are the current uncertainties in the financial markets not losing ground. But even worse, the abundant central bank liquidity that cryptos have benefited from is going to be scarce.
Given the forces at play which tend to be negative both fundamentally and technically, I would favor a conservative/neutral approach to Bitcoin allocation. But to be frank, it would be better to distance oneself as long as the current uncertainties in the financial markets persist. With the fear that the latter will remain bogged down longer than expected.
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