Technical analysis update: BTCUSD (26th November 2021)

Today BTCUSD reached 55 000 USD in tandem with our expectations expressed in the previous 2 posts. Currently, it trades around 54 600 USD per coin. We continue to be bearish on Bitcoin as technical analysis continues to support this thesis. We think current weakness in the global markets will be persistent in the short-term. Additionally, we think that this weakness will be contagious to cryptocurrency markets and it will create headwinds for further rise in cryptocurrencies (in the short-term horizon). We think BTCUSD will continue lower and we expect it to test short-term support at 52 956 USD in the following days.

Our recent popular post from 16th November 2021:

Here we started to speculate about possible double top formation. We also expressed that volume was declining while price continued to climb higher. We noted that this pointed to evaporation of buyers at higher levels of prices. In our opinion, this foreshadowed subsequent drop in price (combined with other warning signs).

Technical analysis - daily time frame
RSI, MACD and Stochastic continue to evolve their bearish structure. DM+ and DM- show also bearish conditions. ADX exhibits growth which suggests that the bearish trend is strengthening. In general, a bearish time frame is extremely bearish.

Technical analysis - weekly time frame
Divergence in RSI is clearly observable. This is a very bearish development. MACD is in the bullish area, however, it is flattening (and reversing to the downside). Similarly, Stochastic also started to point into bearish direction. ADX is very low which suggests the bullish trend of higher degree has lost its steam already. Overall, the weekly time frame is bearish.

Divergence in RSI on weekly time frame:

Divergence in MACD on weekly time frame:

Technical note
Synchronization in the bearish conditions between daily and weekly time frames suggests mounting trouble ahead for BTCUSD. We think BTCUSD is headed way lower and it will drag the rest of cryptocurrencies with it. We think investors should be very cautious in the following weeks.

Fundamental note
Hawkish narrative by the FED, additionally, supports bearish views for the cryptocurrency market. We think that decrease in quantitative easing combined with increase in interest rates will be detrimental to cryptocurrencies as purchasing power of the dollar will be rising. Further, we think prevailing irrationallity in the cryptocurrency markets (especially among lay and retail traders) combined with calls for extremely high prices such as BTC at 200k USD, 500k USD, etc., only shows how inflated this market is (at the moment).

Support and resistance
Major resistance level sits at all time high of 69 000 USD. Below that is Resistance 2 which sits at 64 895 USD (previous top). Resistance 1 appears even lower at 59 603 USD. Short-term support is at 52 956 USD. Then below that is Support 1 at 48 834 USD and Support 2 at 39 573 USD. Major support level lies at 28 600 USD (2021 low).

DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as basis for taking any trade action by individual investor. Your own due dilligence is highly advised before entering trade.

تم فتح الصفقة:

BTCUSD did not manage to test short-term support. We think it is very likely for BTCUSD to trade within range for indefinite amount of time. Trend is becoming neutral.

تم فتح الصفقة:

General stock market continues to show weakness. We previously noted that we expected this to drag cryptocurrencies lower with it. We continue to maintain this notion and we think BTCUSD will retest short-term support soon.

تعليق:

BTCUSD broke below key technical level in tandem with our expectations.

أغلقت الصفقة: تم الوصول للهدف:

Idea was updated in the following post: