Are weak regional banks causing another rush into Bitcoin?

업데이트됨

Over the past six months, we reiterated our notion that we might be seeing one of the most deceitful bear market rallies in Bitcoin. We also outlined multiple developments that raise questions about a genuine bull market and highlighted extremely bullish sentiment, especially among retail. Then, with the fallout of regional banks and Bitcoin’s positive reaction, we stated that Bitcoin might be starting to show first signs of maturing as an asset. However, we also said that we would pay close attention to banks’ earnings and see further Bitcoin’s reactions (in order to determine the importance of this shift).

On 14th April 2023, major banks, including JP Morgan Chase, Citigroup, and Wells Fargo, reported solid earnings for the first quarter of 2023. Interestingly, this date coincided with the top in the price of Bitcoin. Four days later, on 18th April 2023, Goldman Sachs reported its results, and Morgan Stanley with U.S. Bancorp followed the next day. Overall, earnings showed mixed data, with banks still making good profits but experiencing a slowdown in lending and declining average deposits. Bitcoin lost about 12.5% of its value from 14th April 2023 until 24th April 2023, when it dipped below 27 000$. This date coincided with the day when First Republic Bank reported its earnings (after the market close), leading to a more than 49% slump in the price of shares yesterday.

Bitcoin reacted positively to this and jumped more than 6.5%. At the moment, it trades near the 29 000 price tag, slightly below the important resistance at 29 380$. Therefore, we will pay close attention to the cryptocurrency’s behavior in this area and resistance at 29 380$; a breakout to the upside will be bullish and diminish bearish odds in the short term. Contrarily, a failure to hold above this level will add to bearish odds. We will also observe volume and technical indicators. RSI and MACD started to flatten on the daily time frame, with DM+ and DM- performing a bullish crossover. That suggests there is still a chance Bitcoin can continue higher. Accordingly, we remain very cautious and will monitor the price action and market developments in the following days.

Illustration 1.01

Illustration 1.01 shows the daily chart of BTCUSD. Yellow arrows indicate particular days on which banks reported their earnings.

Illustration 1.02

Illustration 1.02 displays the 1-minute chart of BTCUSD. Yellow arrows indicate when Alphabet and Microsoft reported their earnings for the first quarter of 2023 (leading to a jump in the Nasdaq 100 and Bitcoin). High correlation with the Nasdaq 100 continues to threaten the higher price of Bitcoin (especially if the Nasdaq 100 starts giving up these gains).

Technical analysis
Daily time frame = Slightly bearish/Neutral
Weekly time frame = Neutral

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 be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.

액티브 트레이드

Bitcoin spiked to 30 000$. Below is the 1-minute chart; We would like to point out similarities with the previous 1-minute charts we showed over the past few months (ones which we said to look artificial). Additionally, we want to emphasize that the nominal value of the volume accompanying the price toward 30 000$ from 29 000$ equals approximately 10$ million U.S. dollars; we will let you decide whether that is a lot or not.

액티브 트레이드

Even if measured further (up until Bitcoin broke above 29 000$ for the first time after hitting lows slightly below 27 000$), the nominal value of the volume is less than 20$ million U.S. dollars.

액티브 트레이드

The same setup we introduced recently with the bearish trigger below 30 000$ and tight stop-loss above it can be utilized (or with a long entry above the price tag and stop-loss below it, for potential swing trade).