Bitcoin - Do not get fooled by "double bottom" forecasts
Updated
Bitcoin is up more than 5% after an overnight move. Despite that, we remain unshaken by the rising volatility and stick to a bearish outlook for the rest of 2022. At the moment, however, we will pay close attention to volume, price, and sloping resistance. If the price breaks above the sloping resistance, it will further bolster a bullish case for Bitcoin in the short term. In addition to that, we speculate that many people will try to forecast double bottom and buy here, dragging price higher.
Although we do not expect relief to last and turn into recovery. Instead, we think a bounce will be very short-lived, and more downward pressure will follow. Additionally, we expect Bitcoin to mark new lows over time and reaffirm our bearish thesis.
This view is supported by economic tightening on a global scale, rising volatility, and the market progressing into the second stage of the downtrend. Because of that, we remain committed to our price targets of 17 500 USD and 15 000 USD.
Illustration 1.01
Illustration 1.01 shows the daily chart of BTCUSD. The recent decline in volume suggests temporary relief in selling pressure. Ideally, to further confirm our bearish thesis, we would like to see declining volume as the price rises toward the sloping resistance.
Technical analysis - daily time frame
RSI is bullish. Stochastic points to the upside but stays in the bearish area; the same applies to MACD. DM+ and DM- are bearish, striving for the bullish crossover. Overall, the daily time frame is neutral/slightly bullish.
Illustration 1.02
Illustration 1.02 displays the daily chart of BTCUSD and simple support/resistance levels.
Technical analysis - weekly time frame
RSI, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the daily time frame is bearish.
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.
Although we do not expect relief to last and turn into recovery. Instead, we think a bounce will be very short-lived, and more downward pressure will follow. Additionally, we expect Bitcoin to mark new lows over time and reaffirm our bearish thesis.
This view is supported by economic tightening on a global scale, rising volatility, and the market progressing into the second stage of the downtrend. Because of that, we remain committed to our price targets of 17 500 USD and 15 000 USD.
Illustration 1.01
Illustration 1.01 shows the daily chart of BTCUSD. The recent decline in volume suggests temporary relief in selling pressure. Ideally, to further confirm our bearish thesis, we would like to see declining volume as the price rises toward the sloping resistance.
Technical analysis - daily time frame
RSI is bullish. Stochastic points to the upside but stays in the bearish area; the same applies to MACD. DM+ and DM- are bearish, striving for the bullish crossover. Overall, the daily time frame is neutral/slightly bullish.
Illustration 1.02
Illustration 1.02 displays the daily chart of BTCUSD and simple support/resistance levels.
Technical analysis - weekly time frame
RSI, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the daily time frame is bearish.
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.
Note
There is a typo in the "Technical analysis - weekly time frame". The last sentence should be, "Overall, the weekly time frame is bearish."Trade closed: target reached
Our price target of 17 500 USD was reached.
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