Bitcoin - Low volume foreshadows upcoming liquidity issues
The price of Bitcoin stayed flat over the weekend. Additionally, nothing significant has occurred in the cryptocurrency market; therefore, we have no reason to change our bearish views on BTCUSD. This week, we will continue to pay close attention to volume levels hovering around monthly lows and reflecting a little interest in Bitcoin among new investors, making it impossible to reverse the primary trend from bearish to bullish.
Despite that, we continue to see an increase in false calls for the market bottom. That confirms no capitulation has occurred, and indeed, retail investors continue to buy dips, feeding wild rallies predestined to fall later. We expect this behavior to persist throughout the second stage of the bear market, increasing overall volatility.
Additionally, we expect the same from the FED pursuing another rate hike in November 2022. Accordingly, we think this will worsen economic conditions and lead to another selling frenzy. Thus, we remain committed to our price targets and expect them to be hit by the year's end. After that, we expect the market to start slowly progressing into the third stage of the bear market, characterized by the distress selling and abandonment of hopes and dreams among those who once fed the bubble.
Our price targets are 17 500 USD and 15 000 USD.
Illustration 1.01
Illustration 1.01 displays the daily chart of BTCUSD. The red arrow shows declining volume, hinting at liquidity issues in the system. To confirm our bearish thesis, we would like to see a pick-up in volume accompanying a decline in the price.
Technical analysis - daily time frame
RSI, MACD, and Stochastic are all bearish. DM+ and DM- are neutral. Overall, the daily time frame is slightly bearish; however, the trend is still weak.
Illustration 1.02
Illustration 1.02 shows the daily chart of BTCUSD. The yellow arrow points to the exhaustion we presented a few days ago. Interestingly, the price halted its rise slightly above the 50-day SMA.
Technical analysis - weekly time frame
RSI, MACD, Stochastic, DM+, and DM- are all 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.
Despite that, we continue to see an increase in false calls for the market bottom. That confirms no capitulation has occurred, and indeed, retail investors continue to buy dips, feeding wild rallies predestined to fall later. We expect this behavior to persist throughout the second stage of the bear market, increasing overall volatility.
Additionally, we expect the same from the FED pursuing another rate hike in November 2022. Accordingly, we think this will worsen economic conditions and lead to another selling frenzy. Thus, we remain committed to our price targets and expect them to be hit by the year's end. After that, we expect the market to start slowly progressing into the third stage of the bear market, characterized by the distress selling and abandonment of hopes and dreams among those who once fed the bubble.
Our price targets are 17 500 USD and 15 000 USD.
Illustration 1.01
Technical analysis - daily time frame
RSI, MACD, and Stochastic are all bearish. DM+ and DM- are neutral. Overall, the daily time frame is slightly bearish; however, the trend is still weak.
Illustration 1.02
Technical analysis - weekly time frame
RSI, MACD, Stochastic, DM+, and DM- are all 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.
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