Bitcoin - The "Mashinksy" crash and the "panic mode"

In the past 24 hours, Bitcoin fell an astounding 20%, marking a new low at 20 816.35 USD. Since then, Bitcoin bounced above 23 000 USD and continues to trade within its proximity. Yesterday, an important piece of news came out when the Celsius Network, run by Alex Mashinsky, paused withdrawals, swaps, and transfers on its platform. That is a substantial blow to over 1.7 million platform users, leaving their 151 534 BTC locked away. The company's statement says:

“Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, Swap, and transfers between accounts. We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations.”

That is yet another significant development in the cryptocurrency world after just a recent fallout with the Luna stablecoin token. In our view, this will lead to more scrutiny over cryptocurrencies from the U.S. regulators, creating even tighter conditions in the market. Furthermore, we expect the FOMC meeting on 15 June 2022 to accomplish the same. In our opinion, higher interest rates and economic tightening threaten the price of risk assets like cryptocurrencies. Additionally, we think that substantial cracks start to appear in the sector, which will culminate even in more panic selling. Therefore, we maintain our bearish stance on BTCUSD, and our price target stays at 20 000 USD.

*Total cryptocurrency marketcap dips below 1trn. USD!*

Illustration 1.01
The price of BTCUSD approaches crucial support levels from 2017 and 2019. If these levels are penetrated to the downside, that will be a very bearish development.

Technical analysis - daily time frame
RSI, MACD, Stochastic, DM+, and DM- are bearish. Overall, the daily time frame is extremely bearish.

Illustration 1.02
20-day SMA and 50-day SMA continue to confirm the downtrend. However, at the moment, the price traveled too far from its 20-day SMA; in case of a correction, we would be looking for a retracement toward this moving average.

Technical analysis - weekly time frame
RSI, MACD, Stochastic, DM+, and DM- are bearish. Overall, the weekly time frame is extremely bearish.

Illustration 1.03
The picture shows panic selling in Bitcoin. Additionally, increasing volume hints at increasing selling pressure. The market continues to show characteristic signs of the downtrend with strong bounces and even stronger selloffs.



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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.