The king of cryptos on the razor’s edge again! – Last week, many investors breathed a sigh of relief when they saw Bitcoin (BTC) pull away from the $20,000 support. Unfortunately, this respite was short-lived on Tuesday. Indeed, inflation in the United States in August dashed the faint hope. Not because it drops a little every month. But other components have replaced energy as prices continue to rise. And it is clear that the Fed’s monetary tightening measures so far have not shown their effectiveness in fighting inflation.
Which means that the hope of a change in this topic can be rejected for a long time. In this sense, it does not suit the king of cryptos, who himself remains involved in his bear run since his last ATH in November 2021. Especially since the latest technical analysis leads us to consider possible in the recent lower year. And while BTC prices have managed to drag for now, we are not far from a fatal knockout.
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Bitcoin in Weekly Units – Price Breaks Below Tenkan and Back Above $20,000
Barring rare unexpected events, this week’s bearish candle brought Bitcoin back to $20,000. When the price fails below the Tenkan in anticipation of a new technical bounce. Now we find ourselves in the same situation as in mid-June. But by hitting a major support in an underlying trend that remains bearish, I fear that the bears will definitely win the battle.
Like it or not, the technical signals of the weekly units have been favorable to them for several months. First, BTC and Chikou Span prices continue to drop below the Kumo (Ichimoku cloud). And at this point, we can say that their respective paths beyond the cloud will not happen soon. On the other hand, the fact that the prices of the king of cryptos struggled to fill part of the last correction wave, proves that the bears are preferred temporarily while waiting for the evolution of the situation.
Starting with this observation, which is hardly encouraging, the scenario will focus on breaking the support of $20,000. In this case, a third correction wave is likely to emerge below the $12,000 support sign.
Bitcoin in Daily Units – Prices and the Chikou Span under Kumo
The session of September 13, marked by the latest inflation figures in the United States, looked like a hangover for the king of cryptos. Because exactly, prices were driven below the resistance of $22,000 and the lower limit of the Kumo, the Senkou Span B (SSB). And at the same time, they destroyed Tenkan and Kijun together. Today, hovering around $20,000, BTC prices and the Chikou Span are below the cloud of daily units.
To prevent things from going bad, the king of cryptos should quickly recover the height if it finds the resistance of $22,000. Everyone is hoping for a better result than last week. And why not a potential downward line crossing in the bear run which may take it to the resistance of $26,000. Without it a technical signal will signal a favorable trend change in the near future.
But let’s assume that the worst scenario happens, I refer you to the objectives mentioned in the weekly chart analysis.
Now that Bitcoin is close to the same price zones as in mid-June, are we headed for a continuation of its bear run since the last ATH in November 2021? Or is it headed for another attempt at a technical rebound that will temporarily stave off the threat below $20,000? In any case, the bears send uppercuts to the bulls. But it still goes on.
KO or not, the truth invites us to be humble. Not only graphically, the upcoming Kumo planned for the first quarter of 2023 will not facilitate a blowback in the price of the king of cryptos due to its significant thickness. But worse, the Fed’s monetary tightening will continue until it has the desired results. This will be an environment favorable to an unexpected event that will add to the current uncertainties in the financial markets. In this case, beware of exiting the positions made in the most general panic that will re-spawn the conflict in cryptocurrencies as happened last spring.
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