Similar setup to May 2021. A rolling over look characterized by lower lows following higher highs.
This is a very common trend reversal signal for technical traders. This is reinforced by seeing it twice in the past few months. Combined with the fact that all three major SMA averages converged around $47k-$45k and the price rejected that level vigorously.
Note the strong volume associated with these drops. This gives the downtrend more credence. In a bull market, we would expect the up days to have stronger volume than the down days and the reverse in a bear market.
In a bull market, that converged support level would be expected to be a floor. In a bear market, it would act as a ceiling (as it did this week).
On the daily chart, the next area of resistance / support is around $12k.
Legislatively, there is uncertainty on the horizon with new crypto regulations being proposed in H.R.3684 - Infrastructure Investment and Jobs Act and H.R.4741 - Digital Asset Market Structure and Investor Protection Act.
www.reddit.com/r/Bit...regulation_far_more/
www.congress.gov/bil...ess/house-bill/3684/
www.congress.gov/bil...ess/house-bill/4741/
The next halving is estimated as Spring 2024, which has been a frequent catalyst for price increases, so there is no help from fundamentals either.
All further confirmation of the bear market hypothesis.
The remaining source of optimism is looking at the 20-week SMA at around $42k. A weekly close under that level would leave the next weekly support level at around $15k.
If we get the bloodbath, the indicators show a floor around $12-15k. The rally could continue, but it will need to cross the SMA(200), SMA(50), and SMA(20), re-test them and hold.
This is a very common trend reversal signal for technical traders. This is reinforced by seeing it twice in the past few months. Combined with the fact that all three major SMA averages converged around $47k-$45k and the price rejected that level vigorously.
Note the strong volume associated with these drops. This gives the downtrend more credence. In a bull market, we would expect the up days to have stronger volume than the down days and the reverse in a bear market.
In a bull market, that converged support level would be expected to be a floor. In a bear market, it would act as a ceiling (as it did this week).
On the daily chart, the next area of resistance / support is around $12k.
Legislatively, there is uncertainty on the horizon with new crypto regulations being proposed in H.R.3684 - Infrastructure Investment and Jobs Act and H.R.4741 - Digital Asset Market Structure and Investor Protection Act.
www.reddit.com/r/Bit...regulation_far_more/
www.congress.gov/bil...ess/house-bill/3684/
www.congress.gov/bil...ess/house-bill/4741/
The next halving is estimated as Spring 2024, which has been a frequent catalyst for price increases, so there is no help from fundamentals either.
All further confirmation of the bear market hypothesis.
The remaining source of optimism is looking at the 20-week SMA at around $42k. A weekly close under that level would leave the next weekly support level at around $15k.
If we get the bloodbath, the indicators show a floor around $12-15k. The rally could continue, but it will need to cross the SMA(200), SMA(50), and SMA(20), re-test them and hold.
