Technical analysis update: BTCUSD (13th December 2021)

Our current setup on BTCUSD offers two alternative scenarios (with confirmation coming on a bearish/bullish breakout). Today, another bearish breakout below 48 834 USD support level took place. We continue to maintain bearish stance on BTCUSD as technical and fundamental factors point to more downside in the cryptocurrency market. We expect eventual retest of the support level at recent low of 41 967.50 USD. Additionally, we think investors should be very cautious as the FOMC is coming up this week. We expect a hawkish response by the FED (due to very high inflation) which will most likely come in form of a decrease in the QE program combined with hawkish talk about future rate hikes (in 2022 and 2023). Such monetary policies pose medium-term/long-term threat to further rise in price of BTCUSD (due to money supply being constricted).

For us to reconsider our bearish view - BTCUSD would have to retrace back above 48 834 USD (into neutral zone) and then break above the short-term resistance (at 52 956.47 USD).

Chart below depicts the hourly chart of BTC USD.

Series of false (bearish) breakouts from the neutral zone are illustrated along with the current breakout.

Technical analysis - daily time frame
False reversal occured in RSI (after which it turned back to the downside). This is bearish. Additionally, Stochastic and MACD are also bearish. DM+ and DM- show bearish conditions. ADX grew quickly recently; it currently cointains high value which suggests that either correction might be near its peak or bearish trend is getting extremely strong. We think latter is more probably since weekly time frame shows very bearish conditions as well.

Illustration below depicts the daily graph of BTCUSD and volume.

Volume decreased as selling pressure cooled off. We will observe volume closely in the following days as we think substantial drop in BTCUSD would be accompanied by presence of high volume.

Chart below depicts the daily graph of RSI:

Fake reversal is depicted on the chart. We will observe RSI and we will watch out for crossover below 30 points. We expect such phenomenon to be acompanied by heavy selling pressure.

Technical analysis - weekly time frame
MACD, Stochastic and RSI exhibit bearish conditions. They continue to develop bearish structures. Overall, weekly time frame is bearish.

Support and resistance
Major support level is at 28 600 USD while major resistance level is at 69 000 USD. Immediate support/resistance sits at 48 834 USD while short-term resistance lies at 52 956 USD. Between these two price levels lies the neutral zone. Other resistance levels appear at 59 564 USD and at 64 895 USD. Other support levels can be found at 42 900 USD and at 37 573 USD.

DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as basis for taking any trade action by individual investor. Your own due dilligence is highly advised before entering trade.

Trade active:

BTCUSD fell over 4% to as low as 46 358.91 USD. Since then it bounced back near 47 000 USD price tag.

Trade active:

BTCUSD retraced back in the neutral zone. It is possible that correction ceased. We will observe price action within neutral zone and we will wait either for bearish or bullish breakout.

Trade active:

We maintain bearish view as BTCUSD continues its series of bearish breakouts. Additionally, we continue to await retest of recent low at 41 967.50 USD.

Trade active:

Idea was updated in the following post: