Bitcoin - Why no new ATH will be reached in 2022
Updated
Bitcoin rallied over 34% since its low on 25th January 2022. Rally has been fueled by speculation that the FED would not raise interest rates as aggressively as it projects. However, we think the FED will be forced to raise interest rates at least twice this year, primarily due to high inflation which poses structural risk to the global economy. Therefore, we think the current price rally will be short lived and no new all time high price will be reached by BTCUSD in 2022. Instead we think upcoming rate hikes will act as headwinds for further rise in the price of Bitcoin. Additionally, the current bounce in price coincides with retracement towards medium-term SMA (50-day SMA) which is a natural phenomenon and tends to occur when price deviates too far from its moving average. For this reason we will pay close attention to the price and we will watch whether it will manage to stay above its 50-day SMA or not. We expect a drop below the 50-day SMA to be accompanied by resumption of selling pressure. Because of that we would like to set a new short-term price target for BTCUSD to 42 500 USD. Additionally, we would like to set a medium-term price target to 40 000 USD.
Illustration 1.01
Illustration above shows the daily chart of BTCUSD and its volume. Volume can be seen declining as price keeps making new highs. This suggests new buyers are increasingly harder to find near the 44 000 USD price tag.
Technical analysis - daily time frame
RSI is bullish, however, it shows first signs of flattening. MACD performed a bullish crossover above 0 points which is positive for BTCUSD. Stochastic oscillates in the upper area which is bullish. DM+ and DM- are bullish too. ADX undergoes reset through decline. Overall, the daily time frame is bullish.
Technical analysis - weekly time frame
RSI continues to develop medium-term bearish structure which remains intact. MACD is bearish as well. Stochastic oscillates in the bearish area but points to the upside. DM+ and DM- are bearish. ADX contains relatively low value that is on continuous decline. This signals no trend is currently present in BTCUSD; additionally, it suggests choppy price market action. Overall, the weekly time frame is bearish.
Support and resistance
Please feel free to express your own 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 serve as a basis for taking any trade action by an individual investor. Your own due diligence is highly advised before entering trade.
Illustration 1.01
Illustration above shows the daily chart of BTCUSD and its volume. Volume can be seen declining as price keeps making new highs. This suggests new buyers are increasingly harder to find near the 44 000 USD price tag.
Technical analysis - daily time frame
RSI is bullish, however, it shows first signs of flattening. MACD performed a bullish crossover above 0 points which is positive for BTCUSD. Stochastic oscillates in the upper area which is bullish. DM+ and DM- are bullish too. ADX undergoes reset through decline. Overall, the daily time frame is bullish.
Technical analysis - weekly time frame
RSI continues to develop medium-term bearish structure which remains intact. MACD is bearish as well. Stochastic oscillates in the bearish area but points to the upside. DM+ and DM- are bearish. ADX contains relatively low value that is on continuous decline. This signals no trend is currently present in BTCUSD; additionally, it suggests choppy price market action. Overall, the weekly time frame is bearish.
Support and resistance
Please feel free to express your own 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 serve as a basis for taking any trade action by an individual investor. Your own due diligence is highly advised before entering trade.
Trade active
If BTCUSD overtakes its recent high at 45 501 USD then it will force us to abandon short-term and medium-term price targets. Indeed, on such occasion we think it is likely that BTCUSD will continue towards its next resistance near 53 000 USD before drifting lower.Trade closed: target reached
Short-term price target of 42 500 USD has been reached.Trade closed: target reached
Price target of 40 000 USD has been reached.
Disclaimer
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