Bitcoin on October 08, 2022 – The king of cryptos ready to scuttle himself?
The king of cryptos still under threat from a new ATL! – While the week had started well, Bitcoin (BTC) would be on the verge of returning almost to where it was last Sunday. This is to tell you how uncertain the short-term trend remains. And the least we can say right now is that bulls and bears neutralize each other around the $20,000 support, which, as a reminder, symbolically represents the ATH of the 2017 bull run.
The former would like to end this bear run at all costs, which will soon reach a year in a few weeks. As for the latter, they would wait for the opportune moment to annihilate the hopes of a favorable trend reversal. Especially since the FED could no longer open the liquidity floodgates as before due to inflation that is unable to come down significantly.
The latest technical analyzes currently confirm a status quo fragile of the king of cryptos around $20,000. Given the market context, we might have the hunch that we are closer to a scuttlement rather than a release. Hence the question of a possible phase of capitulation which would undermine the morale of the bulls for good.
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Bitcoin in monthly units – Towards a third consecutive month of decline?
For the second month in a row, Bitcoin closes in the red. But nevertheless, it preserves the support of $20,000. And if the essential is safe for the moment, things should not degenerate in October. Because that would mean that the bear run of the king of cryptos could start a new wave of correction. With new lows for the year that would be in sight. As a reminder, October is often marked by historic crashes such as in 1929, 1987 or 2008.
Taking a step back from BTC’s position relative to the Ichimoku curves, we could console ourselves with prices and a Chikou Span above the Kumo. But what matters most to traders/investors is recent momentum. And it is clear that it does not bode well.
Moreover, I would worry in priority of the respective evolutions of the Tenkan and the Kijun in monthly units. A slippage of these two curves of the Japanese technical indicator would sooner or later mean the breakout of $20,000.
Bitcoin in Weekly Units – In Hold Position
The wait-and-see attitude has dominated since mid-September. Indeed, Bitcoin remains stuck around $20,000. From there to consider as an encouraging technical signal, let us not exaggerate compared to the major risks with which the investors are confronted. Especially since the status quo of the underlying price and the Chikou Span under the Kumo continue to stall in weekly units. Not to mention that prices are currently below the Tenkan.
Despite the proximity of BTC prices to the descending line, also note the decline of the Kijun, which itself could be closer to the Tenkan. And the last time we had a similar technical signal, this had caused the previous wave of correction during last spring. This is enough to give new cold sweats to the bulls.
In the event that the yo-yo around $20,000 ends badly, you don’t need to draw a picture. Not because the bear run would pick up again. But because the losses could increase more seriously than expected. With a capitulation that would potentially do psychological damage.
Bitcoin in daily units – Simultaneous failures below the Kijun and the falling line?
In daily units, things would start to clear up. Alas, Bitcoin prices are said to be bumping below the Kijun and the descending line simultaneously since last Wednesday. And if it were to be confirmed throughout the weekend, the threat below $20,000 should once again be taken seriously.
Not only that, BTC prices and the Chikou Span are quoted below the Kumo. But we find a convergence of negative technical signals on the weekly and daily charts. In this sense, everything would lead to believe that the king of cryptos could eventually scuttle itself.
Lest endogenous or exogenous catalysts intervene unfavorably, the bear run of the king of cryptos would return to the front of the stage towards the supports of $16,000 and $12,000. With the threat of a price that would fall back to four figures in the medium term.
Although we see nothing new compared to last week, the tensions surrounding the king of cryptos would become more and more pressing. At such a point the bulls risk leaving their last strength in the battle around $20,000. From a graphical point of view, the significant thickness of the future Kumo in weekly units leads us to fear a complicated start to the year 2023.
Regarding the fundamental aspect, recent news on the financial planet does not plead in favor of a burst of Bitcoin in the immediate future. On the one hand, various members of the FED fiercely confirmed the extension of monetary firming, despite the potential onset of a recession. On the other hand, inflation in the United States is not falling enough to prompt a change of course. And as if that were not enough, the fall in the unemployment rate through an increase in wages, would support the rise in the prices of goods and services for quite some time.
This is why cryptocurrencies sensitive to the lack of liquidity, are still likely to suffer in reference to About Jerome Powell. And as long as the rate hike cycle continues, Bitcoin will remain cold until the next clearing.
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