The king’s return – While most analysts saw Bitcoin (BTC) back to the support at $30,000, the king decided otherwise. The week ends in the green with a about 12% thrust. Cryptocurrencies have rebounded, of course, but is it a rebound that will lead to new bullish momentum, or is it a false rebound that will lead to nothing? To try to answer this question, we will study bitcoin and other financial assets. We will have clues by looking at others risky assets (US markets) and risk off like gold.
Bitcoin vs gold: an outcome that remains uncertain
We know it: bitcoin is, for the moment, a active says risk-on, according to professional actors. In short, it is part of the risky portfolio of professionals, since it is an asset that follows the big movements of the American markets. It appreciates an environment where the dollar is weak and when the pair gold/Bitcoin (GOLD/BTCUSDT) is bearish.
By studying the pair GOLD/BTCUSDT, we realize that it is in range. After experiencing a downtrend until May 2021, the pair is now in a bullish period.indecision. In any trend, whether bullish or bearish, there are periods of range where the pairs neutralize each other. Buyers and sellers can’t decide. It is a calm period that sooner or later leads to an upward or downward resolution. We note that the price was rejected in the short reloading zone (Fibonacci 0.618-0.786), an area where sellers often regain control. Here, it is bitcoin that benefits. It will be necessary to confirm, by going to break the bottom of the range in order to form a new low in this primary bearish trend.
the bitcoin rebound against the dollar is materialized by a decrease of the pair GOLD/BTCUSDT. If the pair makes a new low and confirms the downtrend, this will signal a return of professional players into risky assets. We are in a period where central banks have to deal with a growing inflation. They must therefore make changes in the way they manage the currency (rise in rates, reduction in asset buybacks). Faced with this change in situation, fund managers are reacting by reducing their exposure to risky assets (cryptocurrencies, stocks, etc.), as seen in this pair. We will wait for an outcome to understand where the capital is heading.
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Bitcoin-related US stocks not confirming?
Bitcoin being a risky asset, it is interesting to look at how its counterparts in the American markets behave. In these actions, we find Coinbase. When Coinbase went public, bitcoin found its local top. Studying the Coinbase course helps to understand if professional investors are interested in cryptocurrencies. Indeed, the crypto giant’s figures stem directly from the cryptocurrency craze.
Coinbase’s price against the dollar just made a new low at $162. After going public in April 2021, the price had found a low of $210. Then, the asset broke out of its range on the upside as bitcoin resumed its pursuit of $60,000.
Since the local top found on November 9 on Coinbase, the action has fall Moreover 50% in the last few weeks. The price is currently below a bearish trendline. We will have to wait to break this trendline and develop a structure behind the trendline to find a healthy rise on this asset. The very fact of breaking a trendline is not enough to confirm a return of buyers on an asset. The course must also be structured with higher and higher troughs and peaks. This is not yet the case for Coinbase stock.
The momentum indicator ROIwhich shows the strength of the buyers against the strength of the sellers, is still bearish. It is currently breaking a bearish trendline. But there again, it is too early to speak of a return of the buying force.
Other US stocks that have a connection to cryptocurrencies include Marathon Digital Holdings (MARA) and Riot Blockchain (RIOT). The 2 assets are at important levels to hold. Neither of the 2 assets show any interest in cryptocurrencies currently. We will have to wait to see these assets rise again to speak of a return of interest in cryptocurrencies.
the S&P500which is an index of the 500 largest U.S. listed companies, is in a rebound. The price rebounds on an important support. The price is still below the downward trendline, we will have to wait for the structure to talk about the lowest found on this asset. the ROI is bearish. Sellers currently have their hands on this index.
the NASDAQ is not not in shape, it either. US equities are concretely digesting the announcements of the Federal Reserve American (Fed) about the monetary policy of the United States. Announcements that have shaken the financial markets. And for the moment, there is no confirmation allowing us to say that US equities are on the rise again for a long time.
Bitcoin is therefore going it alone. He bounces sharply after several weeks of decline. At the moment, the gold/Bitcoin pair neutralizes and leaves only very few clues concerning the management of the capital of professional players. The US market is stabilizing, without showing any signs of a bullish comeback for the medium term. Nothing shows a concrete return from investors in so-called risky assets. This week will be interesting, as US equities could structure a near-term low. We are waiting for some confirmation. Are cryptocurrencies capable of resuming an upward trend with a US market that does not follow?
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