Bitcoin: situation does not look good
I was hoping that Bitcoin will close above 40k or break 200 DMA this week. However, it hasn't, and not just that, it is looking weaker as days go by. Let's take a closer look at recent price movement -
Bitcoin made a lower low after making higher lows during the last week. Higher lows are shown in red and the lower lows in blue. Even today, it is trading negative, i.e. a lower low compared to yesterday, implying the continuation of the correction to me. $30k was a support level earlier but it isn't strong support. The next stop is $20k and that would not be nice. However, the probability of $20k is stronger now, compared to what it was a couple of days ago. RSI is in the oversold category but there is definitely room to go lower and stay low for some time.
If we zoom out of the daily chart and look at the weekly, the situation looks even worse. RSI has room to fall. The last two weekly candles are extremely negative. Looking at this week's candle that is yet to close, it did have some strength earlier this week but right now, it is a bearish candle.
50 WMA may act as support but that is again similar to the $30k support line. There may be a bounce from this level but it may not hold the second or third time.
If we zoom into the daily, and look at the 4h chart, then the negative bias is confirmed.
BTC has dropped below the white support line in the shorter time frame. To indicate a reversal of trend on the 4h chart, BTC needs to trade above ~ $40k. However, looking at the weekly, daily, and 4h, I feel biased towards the downside.
Meanwhile, institutional support for bitcoin seems to be holding as reported by cointelegraph. GBTC premiums have risen from ~ 10% negative levels earlier this week, indicating positive flows into the Grayscale trust and a shift in momentum.
I recommend caution at this stage and wait for a clearer signal to buy anything. Regarding alts, if BTC looks negative, there is only one way for altcoins to go - RED.
Posted Using LeoFinance Beta
