Chickens are coming home to roost
Since the dip in Bitcoin's value in November 2022, we have consistently alerted investors to the fact that Bitcoin is going through another bear market rally. For months now, this opinion has been widely unpopular among the majority of the investment community. Despite that, we have repeatedly provided evidence to support our thesis, emphasizing growing irrationality in the market, which has been reminiscent more of a 2021 peak than that associated with the market bottom. In fact, we proclaimed that the bullishness accompanying the rally is higher than during any other bear market rally in 2022, making an excellent case for the most deceitful bear market rally to date.
Over the past week, Bitcoin has been experiencing elevated selling pressure, driving it as low as $26,100 today. Interestingly, this price action accompanies unverified rumors of the U.S. government’s sale of Bitcoins (remember, in March 2023, the U.S. government announced plans to sell 41,139 Bitcoins, and reportedly it sold the first batch of 9,861 units around 14th March 2023; the nominal value of this trade was around $215 million). Following the first sale, we noted that while this execution did not leave a mark on the price, its significance should not be underestimated in the future; in a nutshell, we said that under different conditions (with lesser liquidity in the market, for example), the effect could be more impactful (on the downside) to the price; we continue to maintain this notion.
As for the technical indicators, we continue to observe MACD, which broke below the midpoint, bolstering bearish odds in the short term. In addition to that, we also watch RSI and Stochastic, which continue to develop bearish structures. Besides that, we also monitor DM+ and DM-, which performed a bearish crossover; now, we would like to see growth in ADX which would suggest a strengthening bearish trend. As for our price targets, they remain unchanged at $15,000 and $13,000.
Illustration 1.01
Illustration 1.01 shows the daily chart of BTCUSD. The yellow arrows indicate a bearish breakout below $26,981 and a bearish crossover between the 20-day SMA and 50-day SMA. If the price breaks below Support 1, it will further bolster the bearish odds.
Technical analysis
Daily time frame = Bearish
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.
Over the past week, Bitcoin has been experiencing elevated selling pressure, driving it as low as $26,100 today. Interestingly, this price action accompanies unverified rumors of the U.S. government’s sale of Bitcoins (remember, in March 2023, the U.S. government announced plans to sell 41,139 Bitcoins, and reportedly it sold the first batch of 9,861 units around 14th March 2023; the nominal value of this trade was around $215 million). Following the first sale, we noted that while this execution did not leave a mark on the price, its significance should not be underestimated in the future; in a nutshell, we said that under different conditions (with lesser liquidity in the market, for example), the effect could be more impactful (on the downside) to the price; we continue to maintain this notion.
As for the technical indicators, we continue to observe MACD, which broke below the midpoint, bolstering bearish odds in the short term. In addition to that, we also watch RSI and Stochastic, which continue to develop bearish structures. Besides that, we also monitor DM+ and DM-, which performed a bearish crossover; now, we would like to see growth in ADX which would suggest a strengthening bearish trend. As for our price targets, they remain unchanged at $15,000 and $13,000.
Illustration 1.01
Illustration 1.01 shows the daily chart of BTCUSD. The yellow arrows indicate a bearish breakout below $26,981 and a bearish crossover between the 20-day SMA and 50-day SMA. If the price breaks below Support 1, it will further bolster the bearish odds.
Technical analysis
Daily time frame = Bearish
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.
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