Beware of the black flag on the king of cryptos! – It is useless to remind you how much the FTX affair has caused a lot of ink to flow in the financial world. To the point that it unfortunately generates disastrous publicity vis-à-vis cryptocurrencies.
If in the near future, the possible damage of the bankruptcy of one of the largest empires in the crypto industry could harm Bitcoin, however, we maintain the firm conviction that it will grow out of it in the long term. But for the moment, there is still talk of its bear run since its last ATH in November 2021. With bulls finding themselves in a delicate position.
In a market context where anxiety reigns, let’s see what the latest technical analysis of the price of Bitcoin has in store for us in monthly, weekly and daily units respectively.
Bitcoin in Monthly Units – November Below $20,000?
Even if the month of November is not over yet, Bitcoin looks set to close below the critical $20,000 support or the 2017 ATH. Especially since he couldn’t count on the help of the Ichimoku Kinko Hyo. Firstly, prices would risk going below the Kumo (cloud) in the coming months. Given the scale of the FTX business, a reassembled spectacular would seem to be impossible mission. Second, the Chikou Span although above the cloud, would likely be below BTC prices.
And lately, the unfavorable reversal of future Kumo via a bearish crossover between the Senkou Span A (SSA) and the Senkou Span B (SSB), is worrying. With fears that the crypto king’s bear market could continue to stall in the first half of 2023.
Assuming that the current monthly candle closes below the lows of the year, we observe from reading the chart that there would be no major obstacles to descend towards $12,000. And as you have surely noticed, this last support corresponds to a critical threshold of the last bull run of the BTC.
Bitcoin in weekly units – The hangover!
Last week felt like a hangover. In effect, Bitcoin prices fell sharply below $20,000 and the Tenkan. In such a way that crossing beyond the downline was a decoy behind which many cryptocurrency investors have run. At the same time, the Chikou Span, which lags behind price movements, is now below the 2017 ATH.
Despite new lows for the year, I would like to say that this has no real bearing on the BTC and Chikou Span price status quo below Kumo. However, the bulls would feel the specter of a third wave of correction. And for good reason, the widening of the thickness of the Kumo following the fall of last week, would not plead in favor of a definitive truce of the bear run.
In the event that we say goodbye to $20,000, prices for the king of cryptos will move away from the Kumo. So that the bears could take a bite out of $12,000. And it would not be fanciful to foresee this pessimistic scenario in the presence of a potentially systemic event. With the possibility that Bitcoin ends the year 2022 or begins 2023 at prices below the symbolic bar of $10,000.
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Bitcoin in daily units – Unfavorable polarity shift around $20,000
As luck does not smile on the bulls, they would see with a bad eye the unfavorable polarity change around $20,000, i.e. the passage from support to resistance according to the daily chart. Especially since this coincides simultaneously with Bitcoin prices and a Chikou Span below the Kumo. Worse still, the breakout of the $20,000s could definitely line up in weekly units by the end of the weekend.
However, Bitcoin prices are struggling to limit the breakout at the $16,000 support, midway between $12,000 and $20,000. Then they try to go back beyond the Tenkan. But it is clear that the bulls had a hard time coping with what happened on 8 and 9 November.
A throwback to $16,000 would keep hopes alive for a move closer to $20,000 and Kumo. And in my humble opinion, I think we would leave it at that in view of the recent news about the bankruptcy of FTX. Conversely, we would be looking for a slide towards $12,000 for fear that the end of the year would not end in the best possible way.
In summary, Bitcoin’s bear run since its last ATH in November 2021 is likely to make us see all the colors. Not only do we note lower lows than the previous ones due to new ATBs of the year. Not to mention that the prices are well below the future Kumo in weekly units. But the FED’s monetary tightening rightly punishes the most volatile asset classes, and in particular cryptocurrencies.
As long as the king of cryptos remains at the mercy of a market context that is difficult to grasp, it will have difficulty in cashing in on bad news. Because precisely, the lack of liquidity, consequence of restrictive monetary policies of the central banks, does not favor rebounds likely to maintain a positive momentum. In any event, Bitcoin could be heading for a third wave of correction. With the prospect that the dust can finally settle in the medium to long term.
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