By the theory of effective markets, all known facts about an asset are discounted to the present price as a reflection of the real current value of that asset. Something like this happened during the previous week on financial markets, including the crypto market. Expectations of the future prospectus of the business conditions were fuelled by both FEDs increase of interest rates by 75bps, and Powell`s announcement that another rate hike of 50-70bps is coming in July. In this sense, market discounted not only current 75bps but also the July`s one. Negative sentiment was also supported by the strong pull of FED's balance sheet, meaning less money in circulation and for investments. All markets were heavily in oversold area during the previous week. Margin calls were the ones that had additional effect on strong push of the markets to the downside.
In anticipation of the FED's meeting BTC started the previous week with an immediate drop down to the level of $22K and managed to finish the week clearly breaking the support line at $20K. Coin is currently traded modestly below $18K. Daily trading volumes were significantly increased during the whole week, with dominating selling orders. RSI went down to the level of 17, which is strongly in the oversold territory, moving there for the last six days. Moving average of 50 days is moving away from its MA200 counterpart, but both indicators are still moving with strong downtrend, indicating that the bear market is still on stage.
During the following days, it can be expected that markets will seek for new levels after the latest strong push to the down side. RSI is showing that reversal should occur, but before that, all selling orders need to be fulfilled. Technical analysis should be continued to be taken with some level of precaution, because of the known unknowns related to fundamentals. If it is assumed that $18K is the bottom line of the latest move, then BTC might try to shortly revert to the level of resistance line at $20K. At this moment, financial markets could not count on stronger demand, in which sense, stronger moves to the upside could not be expected. On the opposite side, if the market continues to push the price further to the down side, expected level where the move finishes might be $15K support.
Disclaimer: This article provides exclusive views of the author. It does not in any sense represent a suggestion for trading.
In anticipation of the FED's meeting BTC started the previous week with an immediate drop down to the level of $22K and managed to finish the week clearly breaking the support line at $20K. Coin is currently traded modestly below $18K. Daily trading volumes were significantly increased during the whole week, with dominating selling orders. RSI went down to the level of 17, which is strongly in the oversold territory, moving there for the last six days. Moving average of 50 days is moving away from its MA200 counterpart, but both indicators are still moving with strong downtrend, indicating that the bear market is still on stage.
During the following days, it can be expected that markets will seek for new levels after the latest strong push to the down side. RSI is showing that reversal should occur, but before that, all selling orders need to be fulfilled. Technical analysis should be continued to be taken with some level of precaution, because of the known unknowns related to fundamentals. If it is assumed that $18K is the bottom line of the latest move, then BTC might try to shortly revert to the level of resistance line at $20K. At this moment, financial markets could not count on stronger demand, in which sense, stronger moves to the upside could not be expected. On the opposite side, if the market continues to push the price further to the down side, expected level where the move finishes might be $15K support.
Disclaimer: This article provides exclusive views of the author. It does not in any sense represent a suggestion for trading.
