What a hard return to reality a month later! – While Bitcoin (BTC) was almost seen breaking through the resistance of $ 46,000, the prospect of more aggressive monetary tightening than expected from the FED dashed hopes of an early recovery. bull run. And as if that weren’t enough to undermine investor sentiment, prices for the king of cryptos broke through support at $41,000.
Now, the latest technical analysis is showing some tension regarding the next supports. As the Nasdaq, the equity index most correlated to BTC, has made new lows for the year and settles comfortably below its 200-day moving average, the threat of an uncertain trend that could turn bear run, would gradually approach.
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Bitcoin – Prices Below Kumo in Weekly Units
If the decline were to prevail at the end of the weekend, we would unfortunately be witnessing a historic first since the existence of Bitcoin. Indeed, the digital currency of Satoshi Nakomoto would chain a fifth consecutive week in the red. And indeed, no matter how much I look at the price history, it is clear that we have no similar cases.
As for the current trend, it remains highly uncertain so that it is difficult to rely partly on Ichimoku. Firstly, the five-week series of declines in the aftermath dragged BTC prices below the Kumo (cloud), and confirms the unfavorable technical signal mentioned last week. On the other hand, by breaking the support of $41,000 which represents the neck line of the shoulder-head-shoulder (ETE), the Chikou Span moves towards the bottom of the cloud, the Senkou Span B (SSB) .
And if I were to take a step back, the latest failure below the $46,000 resistance coincides with the king of crypto prices failing to precisely breach the Kumo top, the Senkou Span A (SSA). Like what the Ichimoku has its usefulness, because it is a technical indicator that invites us to be patient when determining a directional trend.
Bitcoin – The intermediate support of $37,000 before $35,000?
To the extent that the weekly chart does not breathe serenity, this opens the door to a continuation of the current decline. Especially since the unfavorable technical signals in daily units show no signs of running out of steam. Because by failing under $41,000 for several days, the prices of BTC and the Chikou Span are below the cloud to such an extent that the support of $37,000 ($37,000-38,000 on the charts) is not more very far.
Without predicting what could happen in the next few days, the gloomy context on the financial markets would give more desire to test this level, which is in my opinion, an intermediate step towards the support of $35,000 ($34,000-35,000 on the charts) in the event of a fall. As a result, sellers would have a slew of arguments against buyers. And that, as long as a catalyst does not overcome inflationary pressures and the Russian-Ukrainian conflict.
In summary, Bitcoin has continued to navigate an uncertain trend for quite some time. And if I were to add fuel to the fire, the crypto king’s latest failure below the $46,000 resistance has spawned a descending line since its last ATH in November 2021. This unfavorable technical signal would carry more weight psychological provided that we had two lower and lower high and low points. In this sense, the breakout of the $35,000 support would be the missing link to validate a bear run. Thus, the scenario of revisiting last summer’s lows around $30,000 would become possible as long as the correlation with equity indices persists.
On this last subject, the FED meeting of May 3 and 4 will be scrupulously followed by investors around the world. With the hope that Jerome Powell clarifies his thoughts on his monetary tightening both in terms of the rate hike cycle and the reduction of the asset balance sheet. In which case we might see BTC prices perform better…or not given the major uncertainties in the financial markets.
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