In the past weeks we were talking about a bullish scenario that did not come true. What is the current situation for Bitcoin (BTC) and Ether (ETH) prices
Technical analysis of Bitcoin (BTC)
Two weeks ago, I mentioned a range breakout from the top for Bitcoin (BTC) after a manipulation phase. Unfortunately, the price broke its range from below and came into the $42,000 – $39,000 area.
This area had already served as support for the price when it stalled in December 2021. Since then, the price has made some moves that we will take up to see more clearly. As usual, let’s start with the weekly view. We had identified the $43,100 area as the closing point of the last low not to be breached. We had a close below this point the week before, and yesterday a close almost at this level.
2 interpretations are possible now:
- The last low has just been crossed on the downside;
- The last low is not clearly crossed.
A validation of the downward break of this technical point would take us straight to the $30,000 that played a major role between May and July 2021.
Bitcoin (BTC) analysis in 1W
Let’s focus on the daily view to refine our analysis. Bitcoin (BTC) remains in the downtrend it started in November 2021. It is still in this identified area of $44,300 – $40,700 with a wick at $39,500. For the moment, there is no clear break of the support and we remain in this hesitation phase.
Bitcoin (BTC) analysis in 1D
I’d like to introduce some additional analysis for Bitcoin. Indeed, I usually supplement these analyses with the price of gold against Bitcoin (PAXG/BTC).
Why?
Simply because they are diametrically opposed assets. Gold is a safe haven (risk-off) as you probably know, and Bitcoin is a highly speculative asset (risk-on). The basis of my analysis admits that to hedge against volatility, large portfolios will buy gold at the expense of BTC.
We can therefore conclude this very simple mechanism:
- Need for exposure to volatility = investment in BTC ;
- Need stability = investment in gold.
If we take the situation between May and July 2021, we can clearly see that the price has held its resistance which corresponded to the $30,000 support. On the other hand, the price manipulation is much less important, and the price has technically respected this level. This makes it possible to validate or not a breakout. In our case, we can see that the resistance on gold against BTC has not been broken, and this confirms that the support of BTC is still valid.
Gold analysis (PAXG/BTC) in 3D
If we go back to Bitcoin, and the study of possibilities, it appears possible a similar scenario as for May/July.
Bitcoin (BTC) 3D analysis
Beware, this scenario will be completely invalidated if BTC support is broken to the downside, along with gold resistance against Bitcoin. What is certain however, is that the short term view (4H) is currently in a bullish configuration and seems to be heading towards the last lost zone, and former range bottom at $45,800 – $46,800.
This area will give us a good indicator of where to go next, as it is a good place to take shorts (bet against the market). This would still fit the theory mentioned above with a final bearish wave that would take out the last players for good.
Bitcoin (BTC) analysis in 4H
Conclusion
Bitcoin (BTC) has lost its important level of $46,000 – $45,000 and has come to rest on its support of $39,000 – $40,000. For the moment the price is managing to hold this area, and could re-start a short-term uptrend. However, it will need to regain many levels to hope that the macro trend will resume its upward movement. In the event of a breakout from below, the $30,000 level should serve as a short term interest zone.
On the Ether (ETH) side, the price has validated its retracement in the $3,200 area, managing to hold it. An encouraging sign for a macro bullish recovery, it will nevertheless be necessary to wait to digest the violent movements of the last few weeks.
In any case, we will have to remain patient and seize opportunities on the other assets in the ecosystem
