Last week we said:
BTC looks neutral on the 4H and Daily, and seems to have bottomed on the weekly chart. Markets seem to have effectively priced in the bad news that seems to come in daily – apart from any black swan events. With investor sentiment remaining extremely fearful, I expect BTC to continue ranging sideways in the $18 to $20k range for now.
BTC briefly broke the $20k mark last week but was quickly rejected and sent back to $19k where it is trading now. This confirms our analysis from last week that BTC would continue trading in this narrow range. With global markets continuing to grind lower – will BTC hold strong in this range?
Let’s take a look at the charts and find out.
Bitcoin Price Analysis
4H moving averages remain in a neutral configuration, with the 50SMA trading between the 100 and 200. The closest MA is the 100, which will act as resistance, priced at $19.5k. BTC rejected off this earlier this week, confirming the resistance.
BTC is currently sitting at local support just above $19k.
On the 4H chart, BTC looks to be oversold and should be bouncing soon. The $19k support can hold for now, perhaps with some short wicks lower. Below this, the previous support of $18.5k could be tested.
Daily moving averages are back to a bearish configuration. The 50SMA is now sitting just below the $20k mark and will cement resistance below this key psychological level. The 200SMA is major reversal resistance at $27k. Breaking this level will confirm a bull market.
Daily RSI is neutral but Stochastic has reached oversold levels, indicating that consolidation and/or a bounce upward is likely from here. This is why BTC may hold above $19k, and certainly above the $18.5k level if we experience a cascading liquidation to that level. Bottom support is at the $17.6k level set in June.
The weekly RSI is oversold and at historically low levels, but Stochastic is uncomfortably close to overbought. In this case, the most likely scenario is that BTC continues to move sideways in the range that has been established over the past few months. Doing so will allow the Stochastic to reset over the coming months and clear headway for a move upward.
BTC continues to trade below the weekly 200SMA, which has now risen to $23.6k. This will act as yet another important resistance level.
Bitcoin Investor Sentiment
The extreme fear sentiment continues as BTC moves in the crab market. As usual, extreme fear is a good time to accumulate, and extreme greed is a good time to distribute.
Bitcoin Fundamental Analysis
Bitcoin’s total network hash has continued to grind higher and is currently at an all time high. While this is good for network growth and security, higher hash means lower profits for miners as long as the price stays low. This puts stress on miners, as confirmed by glassnode data:
Glassnode reports that miners have accumulated ~79k of BTC in their treasuries. If BTC dips below the cost of production – currently around $18k – it could place miners in a state of distress and force them to capitulate a portion of their holdings. This will be an important level to watch if BTC breaks down to lower supports.
BTC looks oversold on the 4H and Daily, but is poised to continue consolidating on the weekly chart. With CPI numbers coming in this Thursday, we expect heightened volatility this week. The $19k zone should hold, possibly with wicks, but if this fails $18.5k support can hold.
Not investment advice. Do your own research.