“What is Bitcoin? A hedge against fiat currency.”
In the last couple of days, Bitcoin was being traded in the range from $31000 to $32000 meaning that the buying power is declining as it has failed to show a significant move from a test of valuable support level at $31000.
As $31000 isn’t attractive for buyers, I can expect a break below this level which will lead to extended losses to $30000, no questions asked.
The question is, whether the support at $30000 will attract buyers or not.
This really depends on the time, when the price breaks below $31000. Why?
Because if the price breaks below $31000 today or tomorrow, it’s bit more likely to find some decent support and retest the downtrend line, where the 20 daily EMA is located, and seek selling pressure there ($33000 area).
But if the price continue to stay in the range from $31000 to $32000, even $33000 for a few days and then break to the downside, I expect for Bitcoin to be really difficult to find support at $30000 as the bearish formation would be ready for a move to the downside.
The fact that Bitcoin is being traded on support sideways pushes the EMA’s lower, giving the break to the downside more space.
Bearish formation? Yes, Bitcoin is currently being traded in a bearish descending triangle with bias to break to the downside.
Either way, buying at $31000 or $30000 doesn’t seems like the smart way to go, as if the price breaks below either of these levels, a heavy selling pressure will follow.
If you are looking to buy dips, buying at $28600 is the most optimistic way to go, a realistic one is to buy at 20 monthly EMA at $27000 and pessimistic at $24000.
!!
These are only levels for the next few weeks, not the final dip levels as weekly time frame suggests a drop to $16000 area as it’s showing a big weekly head and shoulders formation. Yet, this drop to $16000 will hit the supply zone resulting in a sharp move to the upside, similar to covid crash.
!!
5 Daily Support levels are located at:
$31000
$30000
$28000
$26000
$24000
5 Daily Resistance levels are located at:
$32000
$33000
$34500
$35500
$36500
Indicators
Overall daily trend is a strong downtrend as the price continues to attract sellers at 20 EMA, while this EMA is below the 50 one.
RSI shows slight bullish divergence, but no clear indications of a turnaround. This divergence is only saying that the dips are likely to get bought, not that the price will move from now on to the upside.
As RSI fell below 40, bearish momentum is present and we look for losses to extended in the next couple of days.
MACD has turned into a selling wave after a weak corrective buying wave and has a lot of room to move lower. It’s likely to show a bullish divergence later.
Indices?
Yes, I am going to talk about indexes such as SPX500, GER30, US30 and many more.. Why?
These indices are at overbought extremes and pretty much are seeing unsustainable exponential growth, this has to end at some point and turn into a deeper correction, same as Bitcoin is seeing now. As of currently, many bearish signs can be spotted, such as divergences and lack of buying volume when breaking into new highs.
Is this important in any way..?
Yes as Bitcoin likes to follow such indexes, take an example the Covid crash last year, when Indices crashed Bitcoin has followed so this is another reason to be wary, I remain bullish on Bitcoin in long term, but the short term just doesn’t look as great as I would like.
Final Forecast:
A breakdown to $26000, with an oversold correction back to $30000, retest of neckline.
In the last couple of days, Bitcoin was being traded in the range from $31000 to $32000 meaning that the buying power is declining as it has failed to show a significant move from a test of valuable support level at $31000.
As $31000 isn’t attractive for buyers, I can expect a break below this level which will lead to extended losses to $30000, no questions asked.
The question is, whether the support at $30000 will attract buyers or not.
This really depends on the time, when the price breaks below $31000. Why?
Because if the price breaks below $31000 today or tomorrow, it’s bit more likely to find some decent support and retest the downtrend line, where the 20 daily EMA is located, and seek selling pressure there ($33000 area).
But if the price continue to stay in the range from $31000 to $32000, even $33000 for a few days and then break to the downside, I expect for Bitcoin to be really difficult to find support at $30000 as the bearish formation would be ready for a move to the downside.
The fact that Bitcoin is being traded on support sideways pushes the EMA’s lower, giving the break to the downside more space.
Bearish formation? Yes, Bitcoin is currently being traded in a bearish descending triangle with bias to break to the downside.
Either way, buying at $31000 or $30000 doesn’t seems like the smart way to go, as if the price breaks below either of these levels, a heavy selling pressure will follow.
If you are looking to buy dips, buying at $28600 is the most optimistic way to go, a realistic one is to buy at 20 monthly EMA at $27000 and pessimistic at $24000.
!!
These are only levels for the next few weeks, not the final dip levels as weekly time frame suggests a drop to $16000 area as it’s showing a big weekly head and shoulders formation. Yet, this drop to $16000 will hit the supply zone resulting in a sharp move to the upside, similar to covid crash.
!!
5 Daily Support levels are located at:
$31000
$30000
$28000
$26000
$24000
5 Daily Resistance levels are located at:
$32000
$33000
$34500
$35500
$36500
Indicators
Overall daily trend is a strong downtrend as the price continues to attract sellers at 20 EMA, while this EMA is below the 50 one.
RSI shows slight bullish divergence, but no clear indications of a turnaround. This divergence is only saying that the dips are likely to get bought, not that the price will move from now on to the upside.
As RSI fell below 40, bearish momentum is present and we look for losses to extended in the next couple of days.
MACD has turned into a selling wave after a weak corrective buying wave and has a lot of room to move lower. It’s likely to show a bullish divergence later.
Indices?
Yes, I am going to talk about indexes such as SPX500, GER30, US30 and many more.. Why?
These indices are at overbought extremes and pretty much are seeing unsustainable exponential growth, this has to end at some point and turn into a deeper correction, same as Bitcoin is seeing now. As of currently, many bearish signs can be spotted, such as divergences and lack of buying volume when breaking into new highs.
Is this important in any way..?
Yes as Bitcoin likes to follow such indexes, take an example the Covid crash last year, when Indices crashed Bitcoin has followed so this is another reason to be wary, I remain bullish on Bitcoin in long term, but the short term just doesn’t look as great as I would like.
Final Forecast:
A breakdown to $26000, with an oversold correction back to $30000, retest of neckline.
