The king of cryptos on the razor’s edge again! – Last week, many investors breathed a sigh of relief when they saw Bitcoin (BTC) pull away from the $20,000 support. Unfortunately, this respite was short-lived on Tuesday. In fact, inflation in the United States in August dashed fragile hopes. Not because it fell slightly from month to month. But other components took over from energy in maintaining the rise in prices. And it is clear that the Fed’s monetary tightening measures are currently not showing their effectiveness in fighting inflation.
Which would mean that the hope of an inflection on this subject could be put aside for a good while. In this sense, this would not suit the king of cryptos, who himself remains entangled in his bear run since his last ATH in November 2021. Especially since the latest technical analyzes would lead us to potentially consider new more bottom of the year. And while BTC prices have managed to pull through for the time being, we are not far from a fatal knockout.
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Bitcoin in Weekly Units – Price Breaks Below the Tenkan and Back Over $20,000
Barring exceptional unforeseen events, this week’s bearish candle brings Bitcoin back to $20,000. With price failing below the Tenkan in anticipation of a new technical bounce. Now we find ourselves in the same situation as in mid-June. But by dint of hitting a major support in an underlying trend that remains bearish, I fear that the bears will definitely win the battle.
Like it or not, the technical signals in weekly units have been favorable to them for several months. Firstly, BTC and Chikou Span prices continue to bog down under the Kumo (Ichimoku cloud). And on this point, we could say that their respective passages beyond the cloud would not happen anytime soon. On the other hand, the fact that the prices of the king of cryptos are struggling to fill part of the last wave of correction, proves that the bears have preferred to temporize while waiting for the evolution of the situation.
Starting from this observation, which is hardly encouraging, the scenario would be oriented towards the breaking of the support of $20,000. In this case, a third wave of correction would probably emerge under the sign of the capitulation towards the support of $12,000.
Bitcoin in Daily Units – Prices and the Chikou Span under the Kumo
The session of September 13, which was marked by the latest inflation figures in the United States, looked like a hangover for the king of cryptos. Because precisely, prices were ejected below the resistance of $22,000 and the lower limit of the Kumo, the Senkou Span B (SSB). And at the same time, they simultaneously broke down the Tenkan and the Kijun. Now, hovering around $20,000, BTC prices and the Chikou Span are below the cloud in daily units.
To prevent things from going really badly, the king of cryptos would have to quickly regain height when it comes into contact with the resistance of $22,000. All hoping for a better outcome than the week that will pass. And why not a potential downward line crossing of the bear run which could lead it towards the resistance of $26,000. Without it being a technical signal that would signal a favorable trend reversal in the immediate future.
But let’s imagine that the worst scenario occurs, I refer you to the objectives mentioned on the weekly chart analysis.
Now that Bitcoin is almost in the same price zones as in mid-June, will we lead to a resumption of its bear run since its last ATH in November 2021? Or towards yet another attempt at a technical rebound that would temporarily ward off the threat below $20,000? In any case, the bears send uppercuts to the bulls. But these are still holding up.
KO or not, reality invites us to humility. Not only graphically, the future Kumo projected to the first quarter of 2023 would not facilitate a price blowback of the king of cryptos given its significant thickness. But even worse, the Fed’s monetary tightening would continue until it had the desired results. This would constitute an environment favorable to an unforeseen event which would be added to the current uncertainties on the financial markets. In which case, beware of exiting positions carried out in the most total panic which would again sow discord on cryptocurrencies as was the case last spring.
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