๐ฅ Bitcoin's Last Line Of Defence: Macro Analysis
Recently I made a shorter timeframe analysis on Bitcoin and the bullish channel it was trading in.
Although a minor reversal occurred, bears took the overhand and pushed the price down. Once the price got below the channel, all hell broke loose and a massive flush downward followed.
A lot of damage has been done in the last 24 hours. All the patterns which we were following for weeks have been destroyed and there's no clear indication of what will happen next.
Bitcoin is currently trading on the last line of defence for the bulls. This dynamic support line connects the Corona crash from March 2020 to the Summer 2021 lows with the current price. If we see a weekly close below this support we could face bearish market conditions for several weeks or months. First target for a bearish break out would be the summer lows around 30k, potentially lower if we enter a fully fledged bear market.
However, the macro bull-trend is still intact. 30-40 percent drops are not uncommon in Bitcoin's history. If anything, there occurrences are quite 'bullish' when they happen in bull-cycles since they reset overbought market conditions and flush out over-leveraged traders.
All in all, there's no clear saying as where Bitcoin will go now. This week's close will be of massive importance on the overall direction of the market. Since we're in very oversold conditions currently, there's a decent chance for a big bounce in the coming 2-3 days.
In addition, everything will depend on what the stock market and the FED will do. If stocks continue their bearish rally on FED interest rate hikes and bad corona news, there's a decent chance that more red days will follow.
Feel free to share your thoughts in the comments.
Although a minor reversal occurred, bears took the overhand and pushed the price down. Once the price got below the channel, all hell broke loose and a massive flush downward followed.
A lot of damage has been done in the last 24 hours. All the patterns which we were following for weeks have been destroyed and there's no clear indication of what will happen next.
Bitcoin is currently trading on the last line of defence for the bulls. This dynamic support line connects the Corona crash from March 2020 to the Summer 2021 lows with the current price. If we see a weekly close below this support we could face bearish market conditions for several weeks or months. First target for a bearish break out would be the summer lows around 30k, potentially lower if we enter a fully fledged bear market.
However, the macro bull-trend is still intact. 30-40 percent drops are not uncommon in Bitcoin's history. If anything, there occurrences are quite 'bullish' when they happen in bull-cycles since they reset overbought market conditions and flush out over-leveraged traders.
All in all, there's no clear saying as where Bitcoin will go now. This week's close will be of massive importance on the overall direction of the market. Since we're in very oversold conditions currently, there's a decent chance for a big bounce in the coming 2-3 days.
In addition, everything will depend on what the stock market and the FED will do. If stocks continue their bearish rally on FED interest rate hikes and bad corona news, there's a decent chance that more red days will follow.
Feel free to share your thoughts in the comments.
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