Short-term technical analysis of the king of cryptocurrencies

As we know, this week the price of Bitcoin has faced a negative environment in the market, impacted by the global macroeconomic situation and recently the Luna and UST debacle, which has caused market sentiment to position itself accordingly of the Greed and Fear Index, with extreme fear 9/100.

In this sense, according to technical analysis, this uncertainty in the markets has dragged the price of Bitcoin down, causing a fall of up to 37% in the last two weeks and a total fall of -61.30% to its historical maximum, similar to that, registered in the first few weeks when Covid-19 was decreed (-52.93%) in 2020 and that registered in May last year after reaching its all-time high and the ban on mining in China (-53.74%).

Short-term technical analysis of the king of cryptocurrencies
Short-term technical analysis of the king of cryptocurrencies

However, at the time of writing, the price appears to have entered the capitulation zone after a sharp pullback and is looking for a bottom on the daily chart as it is well below the simple moving averages and that a negative breakout is under the lower ones Band boundaries see the Bollinger Bands ($26,700) in the same support area, albeit slightly lower, than the May 2021 drop.

In such a case that this rebound is generated completely and strongly in the next few days because fear and a lot of indecision can still be seen in the lower time windows (4 hours, 1 hour), this could happen with Bitcoin in search of the price zone between $32,800-34,000 to make decisions based on the price movements, including near the 20-day MA which acts as a price magnet.

On the other hand, it’s very possible that from then on, based on the price action and also the fundamentals of the moment, a pattern will be generated on the chart very similar to last year’s – which is already very similar – the next few weeks, maybe months, with daily pullbacks, lots of indecisiveness, a sense of neutrality and then going to test the price in the USD 23k-25k zone to test the MA 200 weeks and from there maybe make the decision to start of a new bull run.

On smaller timeframes, in the case of 4 hours, we saw that despite the fact that the price rallied around $30,000, it was unable to stay above the area where the MA 20 was also in this one If the price surpasses 30,000 again and stays above this moving average in this timeframe, there is a greater possibility of generating the previously mentioned recovery and breaching the $32,000 zone where the MA 50 is located.

However, on the 1-hour chart at the time of writing this note, we can observe price compression between the 50 and 100 moving averages, following the similarities of previous moves on the charts of the same timeframe going up and holding above this compression zone, is most favorable for the aforementioned recovery, passing the USD 32,000 area first. If the opposite happens, the price could, at best, fall back to $26,000.

Disclaimer: This material is intended as commentary on economic or market conditions and does not constitute financial analysis or advice. The analysis presented here is editorial and in no way constitutes investment advice from Cointelegraph. Everyone must do their own research before investing and are responsible for their own decisions.

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