After reaching our price target of 40 000 USD, we predicted a temporary bottom for Bitcoin. We suggested that the price of BTCUSD might be setting itself for sideways price action. That has been the case for the past week. The prevailing trend in Bitcoin weakened even further, and volume declined. In the short term, we remain neutral on BTCUSD. However, in the medium term, we remain inclined towards the bearish scenario. Despite that, we decided not to set any price target for BTCUSD, mainly due to a lack of momentum within the prevailing trend. Although, we think Bitcoin is likely to drop to 35 000 USD (and possibly lower) if the general stock market continues lower (or if BTC sees more decoupling in the positive correlation between the two). We also see additional pressure for the higher price of BTC from the FED and higher interest rates.
Technical analysis - daily time frame
RSI is neutral. MACD is bearish, and Stochastic is bullish. Although, Stochastic oscillates in the bearish area. DM+ and DM- are bearish. Meanwhile, ADX declines, which suggests the prevailing trend is weakening. Overall, the daily time frame is neutral.
Illustration 1.01
The image shows the daily chart of BTCUSD and two simple moving averages. It can be observed that moving averages started to produce whipsaws shortly after BTCUSD started to trend sideways. In addition, the recent false breakout above the short-term resistance is also indicated.
Technical analysis - weekly time frame
RSI is bearish. MACD failed to continue higher and penetrate through 0 points into the bullish zone; instead, it started to flatten and reverse to the downside. Stochastic also reversed to the downside, which is bearish. DM+ and DM- indicate bearish conditions in the market. At the same time, ADX suggests the prevailing trend is very weak, which is reflected in the recent sideways moving price action. Overall, the weekly time frame is bearish but lacks momentum in trend.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Technical analysis - daily time frame
RSI is neutral. MACD is bearish, and Stochastic is bullish. Although, Stochastic oscillates in the bearish area. DM+ and DM- are bearish. Meanwhile, ADX declines, which suggests the prevailing trend is weakening. Overall, the daily time frame is neutral.
Illustration 1.01
Technical analysis - weekly time frame
RSI is bearish. MACD failed to continue higher and penetrate through 0 points into the bullish zone; instead, it started to flatten and reverse to the downside. Stochastic also reversed to the downside, which is bearish. DM+ and DM- indicate bearish conditions in the market. At the same time, ADX suggests the prevailing trend is very weak, which is reflected in the recent sideways moving price action. Overall, the weekly time frame is bearish but lacks momentum in trend.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
