The week in Bitcoin was akin to spending a week with Timothy Leary and his Merry Pranksters at the high water mark of the 1960s, an acid-fueled roller-coaster ride at once terrifying and exciting, joyous and mournful, prone to throw you off the track and into the trance of freefall at any moment, a righteously wild experience, at least until the concrete ground comes rushing up.
For all the price action, it would be fair to guess that Bitcoin is fundamentally different than it was just two weeks ago, and you'd be wrong. China wants to ban Bitcoin; China's wants to ban Bitcoin every year. If China follows through on a Bitcoin ban, two dreadful narratives disappear at once. We can no longer claim that China controls Bitcoin behind the scenes nor can we complain about the amount of Chinese coal backing the mining of Bitcoin. If the Chinese aren't burning coal to mine Bitcoin it almost certainly improves its ratio of renewable energy utilization in an instant. Wasn't it environmental and sustainability concerns that caused Tesla to pull back and suspend their program of trading EVs for Bitcoin.
For the last two weeks we have heard FUD from seemingly every angle. US regulators are opening an investigation into Binance. Binance immediately issued strongly worded statements regarding their commitment to transparency when it comes to tax regulations. We watched as Elon Musk seemed to pull a pump and dump on Doge before claiming he never sold a coin during the entire period. Then we watched as Elon reversed course on Bitcoin, as I mentioned, only to "learn" that Elon and Tesla maintained their diamond hands, intimating they are not selling into the sell-off. We read that the institutions were not selling their Bitcoin positions down over the past two weeks and that the price action was almost exclusively the result of retail panic selling. And then we read that perhaps a power outage in China that impacted mining hash rates was behind the entire crash. The market makers took advantage of bad news, of FUD, to move price, induce panic selling, liquidate stop losses, build their longs and induce shorts, and then reverse price and liquidate those same shorts. The two-week period turned into an extended lesson for new traders to maintain cash positions in their accounts because you never know when crypto will be sold at steep discounts.
All of this led to a double dip and numerous opportunities for traders to take advantage of the volatility. Bitcoin recovered to its 50EMA cloud on the 1H but is still squarely under the 200EMA on the 1H.
Pulling back to the 1D to observe the larger trend, take note of the rising volume coming off the trend reversal. BTC is most definitely in danger of entering a bear market. It is teetering on the precipice, threatening to break the larger trend line observed in blue above. The asset is trading well below the 50-day EMA cloud, which remains well above the 200 day EMA.
The 1W oscillators show that Bitcoin has cooled and could be ready for a price reversal with RSI resting in the mid 40s and CCI at -86.
The MACD reveals the downtrend is showing some signs of breaking as BTC finds support around $37000. Should $37k support fail, the market will look to test $32k again and a break down below $32k could break price out of the bull market trend line and into the $20k's. Upside opportunity is significant as the quick fall leaves the first level of resistance around $48k. Price is largely trading sideways just above the $37k support in the lows $38s.
Finally, for those looking to trade on BTC, here is the 15m chart on this lovely Saturday morning on the East Coast:
*Please bear in mind that the above is technical analysis and opinion, not financial advice. It is on you to DYOR and you should! If you've enjoyed this content, please take advantage of the platform and tip the content creator! It should be known that the author does hold a small position in the assets mentioned in this article, a position that amounts to "insignificant" at best and "comical" at worst.
