Bitcoin – A Decisive Move Forward!

While we’ve been stagnating for the past two weeks, showing signs of weakness, it would seem that sentiment is moving back towards a decline in Bitcoin, ideal for rising if altcoins weren’t bought so much. What can we do?

Warning This article does not constitute investment advice or an invitation to invest. It is for information purposes only. You are solely responsible for your trading and investment decisions.

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Analysis of negative signals

Net slowdown on Bitcoin

This week, we get straight to the heart of the matter. Introductions are overrated! What do we see on a weekly basis?

Several critical points: firstly, we’re on major and significant resistance on Bitcoin (BTC), why?

Quite simply, because in the past it has served as resistance and support! However, this support is the break officially announcing the bearmarket in May 2022. This means that those who have been locked in for the last year and a half have finally had the chance to sell their position, or at least to relieve it, hence the obvious selling phase at this point.

What’s more, don’t forget that buyers in the 15-16 K$ range are at x2, and as a matter of principle this can be a good area to start selling.

We can also see that the RSI is wildly above 70, indicating a clear limit for buyers. What’s more, the chop which serves as a volatility indicator, shows that volatility has just approached its lows. This indicates that volatility needs a breather, which is what the price is doing at the moment.

Finally, candle structure! Indeed, they form what are known as doji… candles that are generally present to indicate doubt or a trend reversal!

Impact of altcoins as leverage

From this image, we can see one very important thing: the quantity of open positions! We’re currently as high as we were at the first peak of bullrun 2021… Altcoins are therefore being leveraged in significant ways, and the very positive funding seems to indicate that many of these positions are purchases. Ideally, we’d need a bearish attack below Bitcoin’s lows to attack altcoins and be able to climb again!

The positive attitude with Bitcoin, the potential bullish scenario!

All you have to do is look at the graph from the previous bearmarket.

Where do you think we are? Hint, I may have hidden an arrow on the chart.

We’re graphically in the same conditions as in May/June 2019. An RSI above 70, strong resistance, a tired chop. And yet, what did the price do then? A bearish attack and a final bullish recovery to liquidate the last short positions dating back to April 2018. However, we’re not at the same time in terms of seasonality, with a run that came at the end of the cycle (spring), whereas now we’re at the beginning of the cycle (autumn).

Conclusion

It would seem that the indicators are pointing to a bearish attack this week and/or next. However, for the time being, nothing is happening and the price remains calm. If we compare with 2019, the price needed this bearish drop/attack before heading north again. The question is, will the past repeat itself?

What’s certain is that Bitcoin against the dollar has broken out of the range from the north and has re-entered it. The probability is therefore that we’ll return to the opposite boundary, which in this case is at the $35,400 level! However, if many are playing this scenario, then they could be accentuating the pump phenomenon to come, which has a target around $48,500! A nice figure when you know where you’re coming from!

While we wait to see the outcome of this bullish scenario, I wish you a good week and see you next week as usual!