Bitcoin Analysis – On the way to the 2017 all-time high?

Dear readers, hello! Here Romain, for a technical review around the evolution of Bitcoin prices, very lively at the start of the week. What are the major technical supports? Is a rebound still possible? Analysis of the situation of the king of cryptocurrencies.

This analysis is offered to you in collaboration with Coin Trading and its algorithmic trading solution.

Quick tour of the general macroeconomic situation

As discussed during last week’s technical analysis, the markets were lively. But that was without counting on the last two days, marked by volatility worthy of an ocean in the middle of a storm. With the consequence of inflation in the United States, which is not decreasing (8.6% for the month of May), operators who had difficulty digesting this news.

Equity markets in bright red from Monday’s session, and a crypto market that collapses by almost 30% in 48 hours. The watchword among investors is “save who can!” “And again, it was without counting on Celsius and its liquidity problem which adds fuel to the fire by blocking withdrawals, swaps and transfers.

From a more global point of view, the main expectation this week revolves around the Federal Reserve (Res) and a possibility of accelerating the rise in key rates. Finally, on the European side, the European Central Bank (ECB) is stopping its asset purchase. A first since 2011. And at the same time it raises its key rates by 0.25 basis points… Waiting to see if this will reduce this inflation which continues to rise.

Let’s talk technical now, zoom in on the Bitcoin charts!

Bitcoin – Weekly chart: Everything schuss!

What an animation at the beginning of the week! And what strength bears against the levels that we thought were solid as concrete. Indeed, the previous support of $28,700 finally gave way on Sunday.. And since then, there seem to be no limits. First the $25,000, and now the 38.2% Fibonacci retracement which is in great danger. And that in just two trading days for this weekly candle.

Weekly Chart – Bitcoin

Looking at the weekly chart things seem obvious: in the event of a close below $22,500, the old high from December 2017 awaits us in the $20,000 zone. Also note that volumes are not left out. Because they are already beyond the levels posted during the previous weeks, a sign that the liquidations are very important and the volatility at the maximum.

To conclude, Ichimoku gives us a rather worrying picture. Indeed, the only support, with this indicator, is in the same area as mentioned above, i.e. $22,500.. And if BTC prices break this level, the next important support is the monthly SSB located at… $10,000!

Obviously, we have many other technical supports before arriving there. But it is still good to discuss all the situations in these uncertain times.

Bitcoin – Daily chart: Lower, still lower…

By zooming in on the daily time unit, we find this same pessimistic picture. With a sharp breakout and a daily Tenkan dragging prices down. All this accompanied by acceleration, with stratospheric volumes. And point of view in daily which shows that the $20,000 zone is not so far after all. Something to give bears ideas, who knows?

Bitcoin Analysis - On the way to the 2018 all-time high?
Daily Chart – Bitcoin

Moreover, the daily RSI, which was trying to break through its equilibrium zone (50%), is now back in the oversold zone. And this without showing any divergence. A first positive signal could be given by a return above 30% for this indicator.

And, always to look higher, the first resistances are the daily Tenkan and Kijun. These first two barriers, so close to each other because of this dizzying drop, are the targets to break to hope to return to test the $27,800.

BTC – A Focus on Dominance

This had already been discussed last week. Bitcoin Dominance sits right in the weekly cloud. A location that can send prices back and forth. In short: neutrality is total.

Bitcoin Analysis - On the way to the 2018 all-time high?
Daily Chart – Bitcoin Dominance

Indeed: brutal return from this Monday. And a clear and clean break from the daily Kijun. However, a retest seems to be expected, in order to confirm this signal. And, if validated, the top of the daily cloud is the next supportat 45%.

Note the approach of the daily Lagging Span (yellow circle) towards price. This may be the bounce area that will allow us to produce this breakout test. A case to follow.

And the general market cap in all this?

Finally, an update of the total capitalization seems necessary. Last week, there was talk of a range (yellow rectangle). And the fact that this would give a signal, depending on the direction in which the curve would come out of it… From now on, it seems relatively clear and the chart below speaks for itself.

Bitcoin Analysis - On the way to the 2018 all-time high?
Daily Chart – Market Capitalization

It also seems important to note that the cryptocurrency market has fallen back below the 1000 billion dollar mark… A first since January 2021. With short-term support located at $821 billion, a flat SSB daily, that may allow prices to rebound. Which could be causing a technical rebound for the whole market. Unless the selling pressure remains too strong, and this rest is only short-lived? To be continued…

Thank you for your loyalty and see you Saturday for an analysis on the Atom cryptocurrency.

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