Bitcoin Analysis โ€“ Beware of False Signals!

Bitcoin Analysis โ€“ Beware of False Signals!

Dear readers, hello! Here Romain, for a technical review around the evolution of Bitcoin prices. Technical review after the volatile week for the king of cryptocurrencies.

Quick tour of the general macroeconomic situation

The previous week saw a rebound in volatility after an announcement explosive from the Federal Reserve. Indeed, although the rate hike of 0.75 basis points was anticipated, the words used by Jรฉrรดme Powell were not. In fact, he points out that the central bank will do everything to fight inflation. And until this one is under control, no accommodation will be expected.

In Europe, the Italian elections threw a chill on the markets, after the election of the far-right party. In effect, some uncertainty lies with this party and a possible exit from Europe. Although the Italian debt remains massive and puts this country under pressure, the markets welcomed this news with great excitement.

Now is the time to take a look at the technical situation of the Bitcoin :

Bitcoin โ€“ Weekly chart: Situation unchanged?

Compared to the previous week, in the medium term the situation remains similar.

Bitcoin โ€“ Weekly Chart

In effect, prices remain below the weekly Tenkan and give no buy signal. This signal will only be given by a break in the $22,000which would release this waiting situation.

Indeed, prices remain stuck on the medium-term support of $18,800. If it comes to break, it will be necessary to consider a retracement until the $14,500the next weekly Kijun dishโ€ฆ But the market seems determined to defend the current support.

Note the double low point pattern that seems to be forming. He is supported by a weekly RSI bullish divergence. It is very early to talk about this type of pattern, because it will only be confirmed by a break in the neck line at $24,500. However, if validated, this will give as the first target the zone of $28,000.

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Bitcoin โ€“ Daily chart: back to square one

After a calm start to the week, this Tuesday saw a rebound in prices accompanied by the rise in all equity markets.

Bitcoin โ€“ Daily Chart

This increase made it possible to break the daily Tenkan and above all to move away from this technical abyss that are the $18,800. Although this rise relieves the spirits, it will take more spirit to show that Bitcoin is ready to go higher.

This will be done by breaking the daily kijun, but mostly from the daily cloud. This resistance located at $22,000 will be the trigger signal for a return to a short-term uptrend.

In the current state, it seems to be a complex task to break the level mentioned above. On the one hand because the mood at the moment remains very negative and the absence of good news penalizes this recovery. On the other hand because a lot of macroeconomic uncertainties leave the markets in the dark and do not allow us to project ourselves into the future. We will have to wait to see more clearly about the rise in rates, the evolution of inflation and a stabilization of the geopolitical situation to conclude on a solid recovery.

Thank you for reading this analysis. And see you Saturday to dissect another cryptocurrency.

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