The king of cryptos between turbulence and improvement – Despite a relatively positive week on the equity indices, cryptocurrencies have not changed much, like a sluggish Bitcoin (BTC) near the $20,000 support. Given its vulnerability to the lack of liquidity linked to the FED’s monetary tightening, it is not surprising that the bear run of the king of cryptos since its last ATH in November 2021 does not disarm, and this, despite the will ferocious buyers not to sink the lowest of the year.
In a market environment filled with uncertainties, we could have expected volatile price movements. And yet, the opposite is happening now. So much so that bulls and bears are minutely awaiting the final outcome of this range very narrow around the 2017 ATH. The first in the hard since the beginning of the year, would like to end this bear market. While the latter, in a position of strength, would like to extend it with a view to a capitulation.
Now, the challenge for next week will be whether bulls or bears will eventually take over.
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Bitcoin in weekly units – To die for!
Yes, it’s boring for an asset class that has a history of being volatile one way or the other. In effect, Bitcoin would be on the way to a fifth week without relief around the $20,000 support. However, the situation could change, because the prices are in contact with the descending line of the bear run. And naturally, the idea of a crossing would have a lot of value in the eyes of the bulls.
From there to consider that most of the bear market would be behind us, do not count on the bears which would easily lower their arms. Especially since the latter have solid arguments in weekly units. Firstly, I tirelessly observe that BTC prices and the Chikou Span remain well below the Kumo (Ichimoku cloud). And in this regard, there is work to do to return to the right side of the barrier.
Second, the Tenkan and Kijun sync down. This would not encourage finding grounds for hope in the context of a bear run. Thirdly, the enormous thickness of the future Kumo could put obstacles in the way of a favorable trend reversal. Lately, Bitcoin prices have been trading below the 200-week long-term moving average (200-mm weekly).
Assuming a throwback on the $20,000, the king of cryptos would pass over the Tenkan. With the objective that prices are coming back close to the weekly 200-MA, not far from the resistance at $26,000. And on occasion, we would potentially witness the formation of a double bottom. Conversely, the breakout of $20,000 would displease many investors, as it would rekindle a new wave of large declines.
Bitcoin in daily units – Prices unable to cross the Kumo
Since April 22, Bitcoin has not been able to cross the Kumo in daily units. In this sense, this highly unfavorable technical signal is proof that the sellers largely have their destiny in their hands. Not to mention that the prices stumble under the Tenkan and the Kijun. In this situation, affording a new rebound would not be a foregone conclusion in order to ward off the threat below $20,000.
But on the other hand, the last candles since mid-September do not give any relevant indication of the upcoming movement. What would currently testify to a king of cryptos still sluggish as we speak. In any case, the forecasts remain open with intermediate levels in the viewfinder.
As long as prices don’t break out of the Ichimoku cloud quickly, we risk burying the $20,000. In turn, the bears would target $16,000 halfway to $12,000. On the other hand, if the crossing of the descending line were to be confirmed, rallying $22,000 would be possible if prices reintegrate the Kumo without any real difficulty. But afterwards, Bitcoin would have to realize what it has not been able to do for a long time, that is to say to go above the cloud.
In summary, Bitcoin sluggish around its 2017 ATH for a while could be interpreted in a number of ways. On the one hand, the bulls have nothing to eat. And on the other side, the bears give the feeling of not being in a hurry, so they have accumulated enough gains before.
Nevertheless, on a fundamental level, things continue to go wrong. Not only that, the Fed’s monetary tightening is likely to last longer than expected due to extremely high inflation compared to an average over the previous decade. But even worse, catalysts such as a decline in the dollar and bond rates would struggle to take hold.
Therefore, if an unpredictable event were to be added to the current uncertainties in the financial markets, the bear run of BTC since its last ATH in 2021 would not be ready to run out of steam. With the key, an additional drop leg which would be signaled by capitulation and despair.
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