Bitcoin - Correlation with the stock market represents a hurdle
With the market, Bitcoin saw a sharp reversal yesterday and retraced back into the proximity of the 20 000 USD pricetag. In our opinion, this price action, once again, represents merely a short-lived bounce predestined to falter later. However, we can not ignore the odds of this price action continuing a little bit further.
Therefore, for more clues about the continuation, we will watch the price's ability to break above the sloping and short-term resistance. These developments will bolster the bullish case in the short term. However, in the face of another rate hike, worsening economic data, and progressing recession, we have difficulty believing that this recent move represents any significant change in the primary trend.
In fact, we believe that the current bounce in cryptocurrencies provides a great opportunity for repositioning on the short side. Therefore, we have no reason to change our bearish stance and stay committed to our price targets of 17 500 USD and 15 000 USD.
Illustration 1.01
Illustration 1.01 shows support and resistance levels for BTCUSD.
Technical analysis - daily time frame
MACD points to the upside; if it breaks above 0 points, it will be very bullish. Stochastic and RSI are rising. DM+ and DM- are bearish. Overall, the daily time frame is neutral/slightly bullish.
Illustration 1.02
Illustration 1.02 portrays the daily chart of BTCUSD. The yellow arrow hints at the retracement from yesterday. The high correlation between the stock market and cryptocurrencies suggests that no primary trend reversal will happen.
Technical analysis - weekly time frame
RSI, MACD, and Stochastic are rising slightly. DM+ and DM- are bearish. Overall, the weekly 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.
Therefore, for more clues about the continuation, we will watch the price's ability to break above the sloping and short-term resistance. These developments will bolster the bullish case in the short term. However, in the face of another rate hike, worsening economic data, and progressing recession, we have difficulty believing that this recent move represents any significant change in the primary trend.
In fact, we believe that the current bounce in cryptocurrencies provides a great opportunity for repositioning on the short side. Therefore, we have no reason to change our bearish stance and stay committed to our price targets of 17 500 USD and 15 000 USD.
Illustration 1.01
Technical analysis - daily time frame
MACD points to the upside; if it breaks above 0 points, it will be very bullish. Stochastic and RSI are rising. DM+ and DM- are bearish. Overall, the daily time frame is neutral/slightly bullish.
Illustration 1.02
Technical analysis - weekly time frame
RSI, MACD, and Stochastic are rising slightly. DM+ and DM- are bearish. Overall, the weekly 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.
