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Bitcoin analysis – A medium with feet of clay?



While many investors were hoping for clarity on a potential pivot in the Fed’s monetary tightening, last Wednesday’s meeting was a major disappointment. By paving the way for further rate hikes to fight inflation, the downward momentum in all risk asset classes since mid-August is likely to continue. Not to mention that the reduction in its asset balance potentially equates to another 1% rate hike.

No matter, Bitcoin has once again preserved the $20,000 mark. And as we speak, the latest technical analysis shows that prices have been oscillating around this critical support for a few weeks. Makes you wonder if sellers are starting to have second thoughts. Or they may be waiting for the perfect catalyst to finally trigger a third wave correction.

In a market replete with uncertainty, it appears that. BTC bear market since its last ATH in November 2021 would show a willingness to stake its claim. So much so that $20,000 would at some point become a support with feet of clay.

Bitcoin – BTC bends but doesn’t break.

Earlier this week we left bitcoin not far off its lows for the year. And before the weekend, the bearish pressure momentarily eased in anticipation of new catalysts. That said, and without using the conditional, we cannot help but think that the technical rebound since mid-June is a thing of the past. As of now, the bear market recovery would be at the starting point.

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Weekly Bitcoin price analysis - September 23, 2022.

Of course, this would not be the view of many cryptocurrency investors. They would like to see another false start. Alas, if we take a humble look at the weekly chart, we have to admit that it would not be in their favor..

First, Weinstein’s Phase 4 rightly contradicts them. Especially since BTC prices are still far from the 30-week moving average (weekly MM30), which in turn has slipped below the $30,000 resistance. Secondly, the downtrend line remains intact until proven otherwise. And lately, technical indicators are slowing toward their respective downlines.

Bottom line, the threat below $20,000 would be growing if these adverse technical signals were to worsen. To get a clearer picture, let’s analyze the daily chart of Bitcoin to detail the possible scenarios both to the upside and downside.

Bitcoin – Prices flirt with $20,000, but for how long?

After hovering around the $20,000 support, Bitcoin will have to take a clear direction. In its bear market since its last ATH in November 2021, sellers remain in a strong position. Because of this, they can feel comfortable.

Daily Bitcoin price analysis - September 23, 2022.

In fact, the MACD and RSI are back below the zero line and the neutrality zone at 50 in daily units, respectively. This explains in parallel the inability of BTC prices to break out of this critical threshold. And as a result, we are witnessing a dry run by the buying crowd, whether we like it or not.

Assuming that the $20,000 support would irretrievably give way, we note that there would be no solid floor until $12,000 support on the weekly chart. This would ultimately lead to a 40% drop. And roughly speaking, the 2022 Bitcoin bearrun would fall within the usual norms of the 2014 and 2018 bearrun. But if we want to desperately hold on to something, the $16,000 support would be an intermediate target.

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In the opposite case, it would be impossible to speak naively of a change of trend despite the possibility of a crossing of the downward line. If BTC prices could rise to $26,000, we would only be delaying the threat below $20,000. In practical terms, to neutralize the bear market in the first instance, a $30,000 recapture would be necessary. But given the current environment, this would only be a slim hope.

BTC – bear market recovery about to happen?

The reason we avoided the worst for Bitcoin over the summer was that investors were convinced that the Fed had hinted at a slowdown in monetary tightening in the second half of 2022. Disillusioned, the latter, under Jerome Powell, consistently asserted the opposite at the Jackson Hole symposium and at the last FOMC meeting.

And as long as U.S. inflation does not fall significantly, we will probably see rate hikes before the mid-term and year-end elections. As a result, Vulnerable to the slightest liquidity weakness in financial markets, bitcoin would remain under significant pressure.

Not only do we get the sense that sellers would play for time before driving the nail in. But in this sense, the lack of positive catalysts would not facilitate price accumulation for a pullback. Especially since. Bitcoin is struggling to decouple itself from its relationship with risky asset classes.

Therefore, the recovery of its bear market since its last ETS in November 2021 would therefore reflect the Don’t fight the Fed darker than ever. In that case, making Dollar cost averaging. (Programmed investment) could be expensive for some time.

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