Bitcoin, Will the First Stop Break This Week?

Following a bullish week, suggesting a rebound rather than a sustained recovery, let’s analyze the short-term potential of Bitcoin taking into account the imminent arrival of summer and the expected retracement.

Warning : This article does not constitute investment advice or an investment inducement. It is intended only as an article strictly informative. You are the only one responsible for the trading and investment decisions you make.

Debrief of the past week and perspectives for BTC

Last week, we anticipated a technical rebound in Bitcoin in connection with the orderflow of altcoins. This rebound did take place, avoiding an unnecessary fall.

Last week's focus on Bitcoin Small bullish week
Last week’s focus on Bitcoin – Small bullish week

The rebound is interesting, but it doesn’t bode well for a sustainable rise, as it occurred in what is called “the sellers’ reload zone”. Instead, the movement at the beginning of the week appears to be the result of seller action.

Analysis of the week and technical indicators

Monday’s bearish move gulps down the entire previous week, it can hurt and smell bad. However, apart from smelling bad, we need to see what the technical indicators and the orderflow are telling us to make a clearer view.

News and Events

First of all let’s look at the events of the week that could bring volatility to the traditional market and therefore to cryptocurrency.

Capture decran 2023 05 01 102014 - Coinpri
Capture decran 2023 05 01 102014 - Coinpri

A nice nugget coming up with interest rates and the FED’s speech! (The US central bank that decides on interest rates, its goal, control inflation (lol)). In any case, the markets are still a little bit waiting for these numbers. Why? Because investors want to see if the FED continues its gentle pace of raising rates, which they believe should control inflation and prevent bank crashes, or if they start to turn sideways, say sorry and bring them back down. (They can also bring them back up, but then it’s a big crash that would fall on all of us).

Technical Analysis

On the AT side, it looks like the decline is not over for several reasons. Momentum indicators show that sellers have the upper hand in the market, suggesting a persistent decline.

Focus on indicators RSI = potential white line support MACD = no sign of end of decline
Zooming in on indicators; RSI = potential white line support; MACD = no sign of end of decline

RSI and MACD

The RSI is showing a bearish divergence, with no bullish recovery at the moment. The white uptrend line could be a good support for this indicator.

On the MACD side (bottom history), no sign of divergence yet, a second bearish wave with divergence creation could be perfect, especially if it comes below $26,480.

But why that number? Mmmmh. Because this is where the cash is. This is the last low point, so the buyers have probably placed their stop loss here. Alalala these humans are predictable. Also, this point corresponds with the 1st stop of Fibonacci(As a reminder, the 1st Fibonacci stop must hold to have a bullish continuation of a movement).

Orderflow of Bitcoin and Altcoins

Capture decran 2023 05 01 104347 - Coinpri
Capture decran 2023 05 01 104833 - Coinpri
Orderflow of altcoins

The orderflow analysis, I could almost have done without it this week, but I prefer not to. Why not? Well, I put the 2 charts next to each other, so there’s not much to say? Wrong.

The first thing to notice is about the behavior of Bitcoin and altcoins on the way up. On Bitcoin, we see that sellers set up over the weekend and have already exited. So no movement. For altcoins, despite the rise, no bullish recovery in Open Interest or funding. This means that the market is feverish and waiting for the next move! (Good sign for a future rise!)

Conclusion

Reading back, I think I’m pretty sharp in my opinion. I have a hard time seeing a Bitcoin dump at $20k so quickly again. Why? The market cycle usually calls for a drop before or during the summer. With summer coming up, we have to keep in mind that we will probably have a bearish attack in a short time. My concern is that we have not yet scraped the $32,000 cash on Bitcoin. This is what makes me say, in addition to the indicators of the day, that a bullish move is coming. However, for this week, the biggest probability is to attack the SOUTH and test below $26,500, where we’ll see if the buying reaction is felt! See you next week!