The king of cryptos under the permanent threat of a new correction? – On the eve of Christmas, the price of Bitcoin is still gray. Its downtrend is hardly weakening despite moments of hesitation from the second half of this year. So much so that the bulls find themselves on the tightrope with each new low of the year.
Moreover, the latest technical analyzes do not suffer from any dispute. Indeed, at the time of writing, prices for the king of cryptos have never managed to break through any lasting resistance so far. Which is typical of a bear market that bogs down over time. But for all that, we can nurture the feeling that the bears could be satisfied with it and make a mini-truce before attacking 2023.
Now, let’s see the possible projections of Bitcoin for this penultimate weekend of 2022.
Bitcoin in weekly units – Prices struggling to recover
It is not a scandal to say that Bitcoin is really in trouble. Not since FTX went bankrupt, but since prices and the Chikou Span gave way permanently under the Kumo (Ichimoku Cloud) from last May.
And at the risk of frustrating many cryptocurrency investors, the king of cryptos hasn’t been able to move firmly above the Tenkan since the second wave of correction last spring. As proof, this unfavorable signal appeared in mid-August, early November and last week. With the fear that the crossing of the descending line is invalid.
But given that the support of $ 16,000 is defending itself well, there would be material to limit the damage to prevent the BTC from ending the year 2022 as it had started. In this case, a bounce towards $20,000 or the 2017 ATH would give bulls some heart. But if, unfortunately, the current uncertainties on the financial markets were not to subside, certain elements of the Ichimoku would not facilitate the objective of a favorable trend reversal. Not to mention that there are many resistances to overcome.
On the other hand, a break of $16,000 would mark a possible capitulation of the bulls. With a third wave of correction developing significantly towards the $12,000 support. This would represent a downside potential of more than 80% since the ATH in November 2021, bringing us back to the historical standards of the two previous bear runs in 2014 and 2018.
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Bitcoin in daily units – Prices without a short-term trend
In daily units, we make the bitter observation that Bitcoin prices have been trending flat since the two big down sessions of November 8 and 9 with varying fortunes. On the one hand, they are below Tenkan, Kijun and Kumo. But on the other hand, the bulls would be consoled by the maintenance of the support at $16,000. Whatever one may say, bulls and bears neutralize each other.
Nevertheless, I regret to tell you graphically that BTC prices have been below the Ichimoku cloud since late March-early April. Which proves once again that the bulls do not see the end of the tunnel. With the fear that the bear run of the king of cryptos will not deflate in the near or medium term.
Under a pessimistic projection, Bitcoin and Chikou prices would deviate dangerously from Kumo. On the sine qua non condition that the $16,000 change polarity from support to resistance. And conversely, we would have to regain ground beyond $20,000 in order to force the bears to redeem themselves. This would coincide with a return of BTC prices above Kumo in the first instance.
In summary, there is no debate about the Bitcoin bear run since its last ATH in November 2021. For me, the last days before the end of the year, would not be a game changer unless the bulls are fighting back sending prices above the 2017 ATH for some reason. And even if this scenario were to occur, the losses from last spring’s corrective wave are still significant. Which would not plead to blow a carrying wind on the king of cryptos.
Not only do cryptocurrency investors have to adapt to an environment risk-off with monetary tightening by the FED which increases the cost of capital and dries up some of the liquidity in the financial markets. But the prospect of a recession (the extent of which remains unknown) would tend towards a downward readjustment of the prices of risky assets, and more particularly of cryptocurrencies.
Therefore, that the bulls continue to be on a tightrope, would not in itself be a surprise if the current uncertainties in the financial markets accumulate like the bankruptcy of Core Scientific. Especially since the high points continue to be lower than the previous ones graphically. Not to mention that the shadow of the future Kumo in weekly units, still reigns.
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