The king of cryptos continues his recovery but until when? – Many cryptocurrency investors are currently happy with the technical rebound of Bitcoin (BTC), despite bad macroeconomic news such as the US GDP contracting for the second consecutive quarter, and the core PCE (statistic much watched by the EDF to measure inflation) which remains at high levels.
But the fact that major risks are largely priced in recently explains the resilience of all risky asset classes. So much so that the theory of market efficiency is becoming ridiculous. To wonder even if it was not yet another ruse to trap the last latecomers who were full sellers.
After dismissing the threat below the $20,000 support, the king of cryptos seems to have decided to test its next resistances. The latest technical analyzes bear witness to this momentum short term. With the prospect that Bitcoin will conquer one of the key thresholds of its last bull run.
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Bitcoin in Monthly Units – A Positive July After Multiple Hesitations Around the $20,000 Support
Except in an incredible situation and after the spring rout, Bitcoin seems set to end on a positive note in July. Not without difficulty in the sense that it took time to rebound from the $20,000 support. Should we be reassured in the short term?
Yes, because the king of cryptos was carried by a lull in bond rates and a timid consolidation of the dollar against the main major currencies (euro, yen, pound sterling, Canadian dollar). No because June’s huge bearish candle is far from over. Hence the conviction that we would limit ourselves to a technical rebound and no more.
However, cryptocurrency investors are looking to cling to the idea that BTC prices are above the Kumo (Ichimoku cloud) in monthly units, and similarly for the Chikou Span. But on the other hand, the evolutions of the Tenkan and the Kijun would encourage me to be on my guard. Their rapprochement, which is the result of the last bearish wave, would potentially constitute an additional source of tension in its bear run.
Thus, the possibility of a Tenkan – Kijun crossover in monthly units would hardly be reassuring from a medium-long term perspective, even if it would not represent a reliable technical signal given its latency.
Projecting onto the weekly chart, Bitcoin’s bear run since its last ATH in 2021 temporarily calms down. On the other hand, prices fail to erase the losses of the weekly candle of June 13th. So that it is not an obstacle to the pursuit of the technical rebound, it would be necessary to overcome two resistances which are close to each other: that of $26,000 and the Tenkan.
In the affirmative, BTC prices would attack a bone, the resistance of $30,000. Beyond its major role in the latest bull run, it could end up near the descending line in favor of upside velocity before mid-August. Even so, prices and the Chikou Span would still remain below the Kumo.
This could be frustrating for cryptocurrency investors not to see the end of the tunnel. But patience will remain in order until prices for the king of cryptos recover to the head-shoulder neck line around $41,000. History to consider a definitive neutralization of the bear run (not to be confused with a true trend reversal).
Bitcoin in Daily Units – Will Prices Cross Above Kumo?
The suspense in daily units would be whether Bitcoin prices will manage to break above Kumo. Especially since a triple bottom has already been validated before, then took root thanks to a throwback on the support of $22,000. This would be an encouraging point that would allow an extension of the technical rebound.
However, the upper limit of the cloud, the SSB (Senkou Span B) which is very flat on several consecutive days in a future projection, could prove to be a tough resistance, not far from that of $26,000. If that fails, BTC prices would remain inside the Kumo with fears of a move back towards $22,000.
But if we keep the same dynamic as this week, the ultimate fight towards $30,000 awaits us. This would coincide simultaneously with a rise in the Chikou Span towards the upper or lower limit of the cloud. And if we will maintain the term of ultimate combat unless otherwise stated, it is that there should be no illusions about the outcome of the technical rebound with regard to the current environment on the financial markets.
Now that Bitcoin’s bear run pause since its last ATH in November 2021 is in the pipeline, let’s hope that $26,000 isn’t the finishing touch on the technical bounce. In which case, I fear that a new bearish wave will start again. But unlike the previous one, it would be a question of capitulation which would leave many players in the cryptocurrency industry behind. So much so that we have a piece of evidence against influencers like Tesla’s massive sale of bitcoins in its last quarterly earnings release.
But on the other hand, the latest FOMC meeting would raise hopes of less aggressive monetary tightening by the FED in the future. Not to mention that the latest macroeconomic figures would seem to confirm this presumed scenario with an easing of inflationary pressures as a result. In that sense, it could help Bitcoin rally to $30,000, the eventual end point of the technical rebound extension.
Crossing the descending line would not be enough to conclude a favorable trend reversal. Especially since there would be a lot of work to tame future Kumo into weekly units. A passage beyond the large resistance zone of $41,000-46,000 would ultimately be the necessary condition to initially balance the balance of power between buyers and sellers.
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