What a total opposite for cryptocurrency investors! – The way seemed to emerge beyond the $ 46,000 resistance for Bitcoin (BTC). Not only were the current risks on financial markets well integrated into prices, but nothing predicted a turnaround from last week. However, two catalysts have arrived since mid-March to counter the rebound of the cryptocurrency king.
First, the future vice president of the FED, Læl Brainard, surprised everyone. Known for his dovish side, he admitted that more aggressive monetary tightening than expected would be needed to fight inflation. And then, this unexpected thunder was sadly confirmed in the last minutes of the FOMC.
This now follows a balance sheet reduction of approximately $ 95 billion per month in addition to rate hikes. Starting in May, the Fed will focus on economic stability at the expense of price support for risky asset classes. Of course, cryptocurrencies have taken the hit, with BTC at the forefront, dangerously close to next support. Faced with this new monetary paradigm, are we seeing a return of uncertainty about the prices of the king of cryptocurrencies?
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Bitcoin – Sudden return below $ 46,000
The big weekly bearish candle is not a good sight why Bitcoin prices fell from $ 47,000 to $ 42,000. Nevertheless I had expressed reservations upstream, because the previous one left me skeptical about the dynamics to come. It is clear that the news this week confirmed this caution.
For investors / traders, the so-called break of the resistance at $ 46,000 is the worst adverse technical signal that can happen to him. Especially since it is doubly a failure, if we coordinate it with some Ichimoku curves in weekly units. On the one hand, the BTC returns in the middle of the Kumo (cloud) and very close to the Tenkan. On the other hand and simultaneously with the latest price movements, the Chikou Span is again embedded in the cloud.
All of these recent technical signals would be enough to bring shoulder-head-shoulder (ETE) back into play if a rapprochement to the $ 41,000 level. But also a return to neutralization of the bullish cycle from 2019, which would be relative given the excellent 2020 and 2021 years.
Bitcoin – Further consolidation towards $ 41,000?
seen how it melts, Bitcoin is likely to threaten the $ 41,000 support, an important level of the past ETE validation. It would be better if the red line was not crossed. Otherwise, we would jeopardize the rebound that began in mid-March. What once again tarnishes the hopes of a favorable trend reversal. And in that sense, breaking the downtrend line since its last ATH in November 2021 would no longer be of much help.
As the nightmare does not end there, the bearish candles on Tuesday and Wednesday caused a drop in BTC prices below the Tenkan and Kijun respectively. Then, at the same time, that of the Chikou Span below the resistance of $ 46,000. Fortunately, the two that are reported remain above the Kumo. This gives us hope that the $ 41,000 could serve as a hub for a new attempt to go beyond $ 46,000.
In summary, many investors believed that the $ 46,000 resistance crossing would quickly become a thing of the past. But that’s without taking into account the Fed’s abrupt reversal of monetary policy, which, in my view, puts things back in order given the inflationary pressures in the United States.
Add to that a strong dollar and a rise in bond rates that don’t encourage risk-taking. As a result, the high correlation with equity indices penalizes Bitcoin. An opportunity to remember that technical analysis is not a reliable tool for predicting price movements. Hence the importance of corroborating it with fundamental analysis.
From now on, we will have to be on the alert if Bitcoin has the bad inspiration to go down to $ 41,000. In the event of a rebound from the TEE’s neckline, the $ 46,000 resistance would still be in the cards hoping for a better result than the previous one. Conversely, the price trend of the cryptocurrency king would return to uncertainty mode.
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