The market is uneasy ahead of the halving event

After failing to gain bullish momentum earlier this month (with a breakout to the upside from a triangle-like pattern), Bitcoin continues to trade erratically. Currently, it hovers around the $63,500 price tag, which appears close to the ascending trendline that connects peaks from December 2023 to mid-January 2024. If this trendline is broken to the downside, it will bolster a bearish case in the short term. The same will apply to a breakout in MACD below the midpoint (on the daily time frame), a bearish crossover between 20-day and 50-day SMAs, and a further uptick in ADX (on the daily chart, signaling bearish momentum is growing). Considering these developments could foreshadow a significant correction (or even a trend reversal), we think it is proper to stay highly cautious. While technicals on the daily chart are growing increasingly bearish, there have not been any significant changes in the number of Bitcoin addresses with balances exceeding 100 BTC and those exceeding 1,000 BTC. This is quite odd, as we would expect large players to unload some more coins amid high prices and the approaching halving event.

Illustration 1.01

The image above depicts the daily graph of BTCUSD and two simple moving averages, 20-day SMA and 50-day SMA. The yellow arrow points to the impending bearish crossover between these two moving averages, normally signaling a trend reversal.

Illustration 1.02

Illustration 1.02 portrays the daily graph of MACD. The yellow arrow indicates a bearish crossover through the midpoint, generally a bearish sign.

Illustration 1.03

Illustration 1.03 shows simple support/resistance levels derived from past peaks and troughs.

Technical analysis gauge
Daily time frame = Bearish
Weekly time frame = Bullish (turning neutral)
*The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of multiple indicators.

Please feel free to express your ideas and thoughts in the comment section.

DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor or any other entity. Your own due diligence is highly advised before entering a trade.

Comment:

Bitcoin broke below the ascending trendline and formed a new low at $59,672 before retracing higher. By establishing these new lows, BTCUSD could be forming a descending channel.

Illustration 1.04

Illustration 1.04 shows the daily chart of BTCUSD. Yellow arrows indicate the latest technical developments.

Illustration 1.05

The graph above portrays the potential formation of a descending channel.