Within an environment of peaking oil and food prices with disturbed supply chains, keeping inflation under control is quite a challenging task for FED. Tightening monetary policy during this year still has not provided expected results, as per May CPI results, so further measures are to be expected in terms of additional rate hike by 50 bps on the next FOMC meeting. Markets are becoming nervous as insecurity is not an environment where they like to operate; hence, we are facing a bear market both in equities and the crypto market, with increasing Treasury yields. As BTC became part of the mainstream, its sensitivity to monetary measures became part of the market game, so it has to wait for inflation to peak in order to face some significant push to the upside.
Although the start of the previous week was relatively good for BTC, reaching $31K, the rest of the week was traded in red. Support line at $30K has been broken to the downside, so BTC is ending the week around short term support line at $28K. Since this is not a significant line for BTC, it opens a path toward next support line at $25K. During the last two weeks, RSI reached level of 50 on two occasions, but was not able to cross this line in order to head toward the overbought market. Instead, the indicator reverted a bit to the downside, finishing the week around level of 40. Moving average of 50 days continues to modestly diverge from its MA200 counterpart. Both lines are still moving with downtrend.
Markets are currently extremely sensitive to fundamentals, in which sense, technical analysis should be taken with precaution. Level to watch in the days to come is $28K, short term support line. There are currently equal chances for this line to hold and to be broken. If it manages to hold, then BTC will revert to the upside to the level of resistance at $30K. Charts are currently not showing that this line might be breached to the upside. On the other hand, if there are further negative fundamentals on the market, BTC might be pushed to the level of the next support line at $25K.
Disclaimer: This article provides exclusive views of the author. It does not in any sense represent a suggestion for trading.
Although the start of the previous week was relatively good for BTC, reaching $31K, the rest of the week was traded in red. Support line at $30K has been broken to the downside, so BTC is ending the week around short term support line at $28K. Since this is not a significant line for BTC, it opens a path toward next support line at $25K. During the last two weeks, RSI reached level of 50 on two occasions, but was not able to cross this line in order to head toward the overbought market. Instead, the indicator reverted a bit to the downside, finishing the week around level of 40. Moving average of 50 days continues to modestly diverge from its MA200 counterpart. Both lines are still moving with downtrend.
Markets are currently extremely sensitive to fundamentals, in which sense, technical analysis should be taken with precaution. Level to watch in the days to come is $28K, short term support line. There are currently equal chances for this line to hold and to be broken. If it manages to hold, then BTC will revert to the upside to the level of resistance at $30K. Charts are currently not showing that this line might be breached to the upside. On the other hand, if there are further negative fundamentals on the market, BTC might be pushed to the level of the next support line at $25K.
Disclaimer: This article provides exclusive views of the author. It does not in any sense represent a suggestion for trading.
