Last week, I warned you regarding a Bitcoin (BTC) which would risk threaten the $41,000 support. The uncertainties surrounding the Ukrainian crisis and its consequences for inflation in Western countries, unsurprisingly brought us back to harsh reality. As investors hate uncertainty, the king of cryptos highly correlated with risk aversion, will not draw crowds as long as volatility in financial markets remains high.
The failure on one of the key resistances has aborted the rebound attempt since the end of January. It makes you wonder if the BTC is close to a capitulation phase. Hot, the weekly and daily technical analyzes do not plead for a return to favor. Enough to continue the deadly winter and continue to make buyers regret.
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Failure below the resistance of $46,000 and the Tenkan
The two weekly bearish candles (orange dot) reflect Bitcoin’s inability to break through the resistance around $46,000, the Senkou Span A and the Tenkan. This triple negative signal does not bode well for buyers. The crypto king is on a wire around the $41,000 support. With volatility continuing at elevated levels, sellers hold all the cards.
This causes BTC prices to return inside the Kumo. At the same time, the ultimate curve of l’Ichimokuthe Chikou Span, would be regarding to return inside the Kumo (green dot). If the support at $41,000 were to be breached, we would go from a bullish bottom trend to neutral.
As a result, we might attend a false break in the neck line of shoulder-head-shoulder (ETE) which would take us to the recent lows, and in passing to definitively validate the bearish chart pattern. The scenario of a return to the next support around $30,000 would not be so far-fetched at the time of writing.
Bitcoin: the Kijun in support in daily units
In daily units, the Kumo unfortunately played its role as a major obstacle to Bitcoin’s attempted rebound, twice when it tried to break the resistance of $46,000. To make matters worse, the hope of an inverted shoulder-head-shoulder (ETEi) was sharply swept away by the resurgence of tensions in Ukraine.
Now, prices have cushioned their fall trying to stay inside the Kumo. In the short term, this makes it possible not to return to the wrong side of the barrier… especially since BTC prices have crossed the downtrend line. What cryptocurrency investors are clinging to.
Nevertheless, they should not be content with this argument to consider a more sustainable rebound. In effect, the Chikou Span is not ready to come back quickly near the Kumo. This small detail that is important, does not favor a definitive upward trend reversal. And given the current backdrop, we would be wrong to rule out a relapse to the recent lows, or at worst, the $30,000 support.
In summary, Bitcoin should preserve the $41,000 support at the risk of experiencing an end to the winter season under very high tension. Even if the hypothesis of a de-escalation in Ukraine takes shape, it will still be necessary to remove the uncertainty of the Fed’s monetary tightening, which depends on the next inflation figures in the United States.
As long as the horizon is not clear on this subject, the chances of seeing BTC prices turn higher seem compromised. Furthermore, and contrary to popular belief, the lack of regulation of cryptocurrencies is a hindrance for institutional investors who are very attached to counterparties. This might explain Bitcoin’s difficulties in breaking through its key resistances and the threat of falling below $41,000.
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