The resumption of the bear run of the king of cryptos soon? – Unless the situation changes during the weekend, the Bitcoin (BTC) could make the suspense last longer around $20,000. Especially since the bulls seem to run out of steam a little more with each rebound attempt. And for good reason, the fundamental factors such as the rise of the dollar and the continuation of monetary tightening by the FED, do not plead in their favour.
Moreover, the speech of the American central bank about the fight against inflation during the symposium of Jackson Hole, would not be listened to literally. Because putting quantitative easing back on the table would amount to supporting consumer prices. Understand that this is not what the Fed would like in the long term. Hence the assumption that the various bear runs on all risky asset classes may continue. This would not help the affairs of the king of cryptos, who himself has been drinking since his last ATH in November 2021.
The latest technical analyzes concerning it indicate nothing new since mid-September. And in a market context where uncertainty is intensely predominant, the bears always remain in a position of strength at the expense of the bulls.
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Bitcoin in weekly units – Prices stagnating around $20,000 for almost four consecutive weeks
As a fourth consecutive week around $20,000 looms, Bitcoin is approaching the descending line of the bear run. At first sight, the bulls would perceive a possible crossing as a favorable technical signal to reverse the trend. But on the condition that it is justified by first-rate fundamental catalysts. And as such, it is clear that it is the dry breakdown.
Even if we want to please the bulls, crossing the descending line would not be enough to endanger the status quo of BTC and Chikou Span prices below Kumo (Ichimoku cloud). Because it would be necessary to climb to the levels of the end of 2021 to initially hope for a neutralization of the bear market. On the other hand, the thickness of future Kumo is slowly but surely expanding. With the fear that the first quarter of 2023 could be bad for the king of cryptos.
That being said, in the short term, the weekly Kijun has stabilized around the $30,000 resistance after two weeks of declines. From there to perceive this situation as bringing hope…
Bitcoin in Daily Units – Crossing the Default Falling Line?
As you can see on the daily chart, Bitcoin has been trading in a very tight range around the 2017 ATH since mid-September. To the extent that the situation could harm bulls. Indeed, prices and the Chikou Span (lagged price curve) are still below the Kumo. However, the fact that the Ichimoku curve previously replicates the price movements of the underlying at the contact of the $20,000 support, would prevent a new wave of correction to date.
But on the other hand, it does not prevent the negative alignment of the prices of BTC and the Chikou Span below the cloud, whether in daily or weekly units, does not breathe serenity for the coming deadlines. This is why the threat below $20,000 would resurface again. In this case, the bears would aim for $16,000 as an aperitif, then $12,000 as a main course. And to finish the menu, should market stress come to a head, crypto investors should consider a four-digit King of Cryptos price.
Conversely, the bulls would grant themselves a respite provided that BTC prices reintegrate into the Kumo and rise towards $22,000. An extension to $26,000 would then be within reach for the second time since mid-June.
In summary, the bulls are always in the dark until proven otherwise. Until we see higher and higher highs and lows, there will be no debate to thwart Bitcoin’s bear run since its last ATH in November 2021. Not only would the weekly chart leave a situation which is deteriorating. But even worse, the FED would have no intention of making a generous gesture vis-à-vis the financial markets regarding its monetary tightening.
In this sense, the high correlation between cryptocurrencies and equity indices could further penalize Bitcoin. And imagine that the most popular values of the American dimension such as Tesla and Apple lose their footing under their respective supports, we would then risk witnessing a real stampede on all risky asset classes. In which case, Bitcoin, in this case, would potentially start a new wave of correction under the sign of capitulation.
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