Last week we said:
The tide has shifted – at least for now – from bears to bulls, as BTC breaks resistances and confirms new support levels. However, momentum indicators on short timeframes show that BTC needs to cool off and revert back to mean RSI before continuing past $45k resistance. On the weekly, this appears to be the start of a new bullish wave that should carry for several weeks/months.
Our prediction was spot on! After failing to break past $45k resistance, BTC has retraced to support levels and has been consolidating between $42-43k. This consolidation period is giving the RSI a chance to cool off and gather strength. Also causing the market to be tepid are inflation fears in the US, as investors fear a potential emergency rate hike from the Federal Reserve on Monday. Such a move would spook markets. Black swan events increase the risk of trading this week, do so with caution. NFA.
Let’s take a look at the charts this week and see if we can predict BTC’s next move.
Bitcoin Price Analysis
Here on the 4H chart, we can see a golden cross pattern emerging. There is also a bearish divergence, as the price has crossed below the 50MA, which will act as a local resistance zone. Support can be found at the 100MA ($41k) and 200MA ($40,250).
The 4H RSI is neutral, but the stochastic is moving upward. We may see a test of $43k resistance, but ultimately continued consolidation is most likely.
On the daily chart, we can see a death cross pattern formed last week, but we have a hidden bullish divergence. The price has crossed above the 50 SMA, which acted as support over the past week. Currently, the 50 SMA is acting as support at $41.9k. Resistance is at the 100/200 SMA, both around $49k.
On the daily time frame, the RSI still looks slightly overbought, and Stochastic momentum is downward. However, it appears that the RSI found support at its 14-day average, and the stochastic may also bounce. Once again, it seems continued consolidation is most likely for the time being.
The weekly continues to look bullish. RSI is still oversold and the stochastic is moving upward, signaling positive momentum. The weekly 50 SMA will act as resistance, currently at about $48k.
Bitcoin Investor Sentiment
Market sentiment remains fearful. FUD continues to drive markets down or sideways.
Bitcoin Fundamental Analysis
Macroeconomic headwinds have caused traders to become tepid, as people look to risk-off in expectation of feds raising rates. Also, potential black swan events loom as fears of war in Europe are adding additional caution. Events like this shake markets of every type. Bitcoin may have an advantage here as it is seen by many as a reserve / safe haven asset. As such, it is important to trade with caution.
Conclusion
The market looks likely to continue consolidating between support and resistance. Fundamentals take a back seat with multiple black swan events on the horizon. As such, trade with extreme caution during this time.
Support Zones:
- $41.9k (daily 50 SMA)
- $40k (4H 200 SMA
- $36k
- $33k (range bottom)
Resistance Zones
- $43.2k (4H 50 SMA)
- $48-49k (Daily 100 / 200 SMA / Weekly 50 SMA)
Not investment advice. Do your own research.
