Today, we await a much anticipated FED meeting, with central bankers expected to raise interest rates in the range between 75 bps to 100 bps. Over the past few weeks, we said that more rate hikes would put additional pressure on the U.S. economy and drag it into a deeper recession. As a result, we expect such a period to be accompanied by risk aversion, leading to a selloff in the general stock market and cryptocurrency sector.
Although we do not rule out the initial bounce up in the price of Bitcoin after the FED decision (though we expect it to be short-lived if it occurs). Our reasoning is that many investors will be (again) on the lookout for the FED pivot. However, we do not think the FED will backtrack its monetary policy in 2022; quite contrarily, we believe the FED will pursue the path of tightening throughout 2023, further deteriorating economic conditions.
The same grim story is told by volume hovering around monthly lows and by many technical indicators flashing warning signs across the board. Daily, weekly, and monthly time frames are all bearish, which is ideal for the continuation of the downtrend. Therefore, we have no reason to change our view on Bitcoin. Accordingly, we remain bearish, and our price targets stay at 17 500 USD and 15 000 USD.
Illustration 1.01 Illustration 1.01 shows the setup with two alternative trades and the yellow arrow pointing to volume at weekly lows.
Technical analysis - daily time frame RSI, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the daily time frame is bearish.
Illustration 1.02 The picture above shows the daily chart of BTCUSD. To further confirm our bearish thesis, we would like to see Bitcoin fall below the Support 1.
Technical analysis - weekly time frame RSI, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the daily time frame is bearish.
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 be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Thanks a lot for the BTC update. The US CPI numbers were then the long overdue wake-up call to all the bullish persons. Actually your articles have been warning us much earlier than that. Some private investors have put even more money in the sand by "eternal" dip-buying which will ultimately led to ever higher losses. Wall Street will mostly like remain bearish for a while. Demand for the USD continues unabated ahead of the Fed's interest rate decision. The strong USD and concerns about a slowing economy continue to weigh on commodity prices. I believe soon we will see your TPs for BTC and ETH, which you have already told quite some time ago. Thanks for the great analysis all the time.
Tradersweekly
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@AngelaCat, I agree. Many people who have not realized dip buying does not work anymore will double down on losers, leading to more losses. I also believe we are near the time we will see my price targets being hit. Thank you once again for your kind remarks!
SwallowPremium
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Very professional work! A clear chart with a good description of the scenario. Thank you for sharing!!
Demand for the USD continues unabated ahead of the Fed's interest rate decision. The strong USD and concerns about a slowing economy continue to weigh on commodity prices. I believe soon we will see your TPs for BTC and ETH, which you have already told quite some time ago. Thanks for the great analysis all the time.