Bitcoin - The bottom fishing turns out to be painful for retail

Yesterday, we warned that the (irrational) bullish exuberance among retail investors foreshadows more pain for the price of Bitcoin. Shortly after that, Bitcoin invalidated its bullish breakout for the third time and started to fall. Finally, after erasing more than 7%, Bitcoin halted its decline at 29 309.84 USD. Since then, BTCUSD has been mainly trading sideways. We continue to be bearish on Bitcoin, and we maintain our price target of 25 000 USD. Our view is supported by bearish fundamental factors like higher interest rates in the U.S. and economic tightening, which will put more pressure on the U.S. economy and cryptocurencies. As a result, we expect the downtrend to unravel in the coming months and Bitcoin to form a new low.

Illustration 1.01

Illustration 1.01 shows the failure of the bullish breakout (invalidation) and subsequent drop in the price of BTCUSD. We believe that fishing for the bottom will continue to punish dip buyers.

Technical analysis - daily time frame
RSI, Stochastic, and MACD are bearish. The same applies to DM+ and DM-. Overall, the daily time frame is bearish for BTCUSD.

Technical analysis - weekly time frame
RSI, Stochastic, and MACD are bearish. The same applies to DM+ and DM-. Overall, the daily time frame is very bearish for BTCUSD.

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. Therefore, your own due diligence is highly advised before entering a trade.

Trade active:

An hourly volume increase suggests dip buyers are returning to the market. We will monitor volume closely. Favorably, we would like to see an eventual decrease in volume accompanying the price increase.

Trade active:

The volume starts to flash a warning signal.

Comment:

We will pay close attention to the volume at the U.S. market open; we will monitor it to see if it is sufficient to sustain a higher price.

Trade active:

Trade closed: target reached:

Our price target of 25 000 USD was reached.