Bitcoin - The ominous warning sign for BTCUSD
Two days ago, we warned that the rally in Bitcoin might be near its end. We stated that the rally became accompanied by a sharp decrease in volume, which could foreshadow a potential breakdown in price. Meanwhile, Bitcoin fell below the 100-day Simple Moving Average and support area at 45 850 USD. These developments are very bearish for BTCUSD. In addition to that, technical indicators on the daily time frame continue to flash ominous warning signs.
Illustration 1.01
The picture above shows BTCUSD in the daily time frame. Yellow arrows indicate the rise in price and the simultaneous decrease in volume.
Drop below the 100-day SMA forced us to abandon our previous bullish outlook and abandon the price target of 50 000 USD. However, in the thread from 29th March 2022, we updated our new price target to 45 000 USD. This price target remains valid.
Technical analysis - daily time frame
RSI failed to penetrate through 70 points and reach the overbought zone. That is particularly troubling as RSI instead reversed and now points to the downside. Meanwhile, Stochastic also switched to the downside. MACD remains in the bullish area, though it started to flatten within the last two trading sessions. DM+ and DM- are bullish, and ADX is highly elevated. The current condition of ADX suggests that the rally is near its peak, or it most likely peaked. Overall, the daily time frame continues to flash ominous warning signs for Bitcoin.
Illustration 1.02
The chart above shows the invalidation of the bullish breakout. That adds to the bearish sentiment.
Technical analysis - weekly time frame
RSI and Stochastic are bullish. MACD is neutral. DM+ and DM- performed bullish crossover just recently. ADX contains a relatively low value, suggesting that the higher degree trend is neutral. On the weekly time frame, technical indicators signal mixed conditions for BTCUSD with no significant trend.
Illustration 1.03
On 29th March 2022, we presented this setup for BTCUSD.
Support and resistance
Immediate support/resistance sits at 45 850 USD. Support 1 is at 42 591.68 USD, and Support 2 is at 32 950.72 USD. The major support level can be found at 28 600 USD. Resistance 1 sits at 42 098.60 USD, and Resistance 2 lies at 59 250 USD. The major resistance level is 69 000 USD
Please feel free to express your own 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. Your own due diligence is highly advised before entering a trade.
Illustration 1.01
Drop below the 100-day SMA forced us to abandon our previous bullish outlook and abandon the price target of 50 000 USD. However, in the thread from 29th March 2022, we updated our new price target to 45 000 USD. This price target remains valid.
Technical analysis - daily time frame
RSI failed to penetrate through 70 points and reach the overbought zone. That is particularly troubling as RSI instead reversed and now points to the downside. Meanwhile, Stochastic also switched to the downside. MACD remains in the bullish area, though it started to flatten within the last two trading sessions. DM+ and DM- are bullish, and ADX is highly elevated. The current condition of ADX suggests that the rally is near its peak, or it most likely peaked. Overall, the daily time frame continues to flash ominous warning signs for Bitcoin.
Illustration 1.02
Technical analysis - weekly time frame
RSI and Stochastic are bullish. MACD is neutral. DM+ and DM- performed bullish crossover just recently. ADX contains a relatively low value, suggesting that the higher degree trend is neutral. On the weekly time frame, technical indicators signal mixed conditions for BTCUSD with no significant trend.
Illustration 1.03
Support and resistance
Please feel free to express your own 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. Your own due diligence is highly advised before entering a trade.
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