Bitcoin Sell Off Realistic Price Deep Dive

Financial markets plummeting and macroeconomics hit with a torrent of shocking news what does this mean for Bitcoin and cryptocurrencies?

Before jumping into Bitcoins (BTC) price analysis it is important to understand the top reasons why markets are falling at an accelerated rate.

• Inflation throughout the world is at record highs with inflation in United States of America at its highest in 40 years 8.6%
  
• Interest rates are rising sharply with Fed increasing interest rates by 75 basis points this week the largest since 1994.
  
• Dollar strength index DXY is steadily increasing indicating investors are moving money out of risk assets to less risky ones e.g. bonds & cash
  
• Specifically, to cryptocurrency markets the crash of Terra’s $LUNA and $UST combined $50 billion spooked investors and raised concerns.
  
• Rumours of Celsius and Three Arrows Capital insolvency due to large exposure with Terra assets which leads questions to which other cryptos will fall in the domino effect creating further sell off panic.
  
• Many countries announcing and investigating new cryptocurrency regulations and laws. (Subscribe here to be notified of articles on latest regulations)
  
• Fear and greed index is at all time-lows of 7 this week and below extreme fear levels for the last month.
  
• Cryptocurrency total market capitalization has dropped from all time high of $3 trillion to below $1 trillion a $2 trillion decline in a few months.
  
• Specifically, Bitcoin has experienced 9 weeks of price decline the first time in history and continues with effectively 11 weeks of price decline.
  
• Bitcoin price has retraced below its previous all-time high for the first time.
  

With the global financial market scene set above we can expect the following BTC price action in the near future. Looking at the area in box number one on my technical analysis chart above.

• Bitcoin weekly candle close broke 0.382 Fibonacci support level $28500 to the downside.
  
• 200 Day weekly moving average a significant indicator (green line) which has proven to be historical support for previous bear markets and signalling bottoms has breached $22000 level this week for the first time.
  
• In confluence price has fallen out of current trending channel illustrated as two yellow upward parallel lines.
  

What does this mean for Bitcoins price and key levels?

• Next level of support which needs to hold is 0.236 Fibonacci around $19000 to prevent further downside.
  
• Sell off at $19000 level will take Bitcoin to the next significant level of interest by investors the $10000 red line in box number two.
  
• Failing the above levels of support $3000 is a very real possibility as final bottom since we have seen most significant key levels decimated over the past few weeks due to macroeconomic conditions.
  

Let me know your thoughts in the comments below and if you would like to know what this means for altcoins in your portfolio. Till then stay safe and always remember to apply appropriate risk management to your investments.

Legendary Investment Trader, Cryptocurrency & Web3 Master
Boundless Lord

Commentaire:

Next level of support which needs to hold is 0.236 Fibonacci around $19000 to prevent further downside.