Bitcoin might be stuck in a major range between the 25231 support and the 31044 resistance as the uncertainty around the future outlook is now at its highest levels. On one hand, we have some resilience in the economies with the inflation rates slowly normalising, but on the other hand, we have signs of weakening growth and the central banks committed to keep monetary conditions tight for a long time. The technicals should help with the risk management until we start to get a clearer direction.
Bitcoin Technical Analysis – Daily Timeframe
On the daily chart, we can see that Bitcoin bounced again on the key 25231 support and rallied into the downward trendline where it found a strong resistance. This is where we can expect the sellers to pile in with a defined risk above the trendline to target a break below the key support. The buyers, on the other hand, will want to see the price breaking above the trendline to target the highs again.
Bitcoin Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price has been diverging with the MACD while it approached the trendline. This is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, we should see a pullback into the black trendline where the buyers will pile in with a defined risk below the trendline to target a break above the major downward trendline and new higher highs. The sellers, on the other hand, will want to see the price breaking below the trendline to confirm the reversal and position for a selloff into the key support.
Bitcoin Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the support zone around the black trendline and the 26800 level. There’s nothing to do at the moment other than waiting for a pullback or a breakout.
Upcoming Events
This week has a few important economic releases that can have an impact on Bitcoin. Today, the Fed is expected to keep rates unchanged with the market focusing more on the Dot Plot and Powell’s press conference, where he’s likely to reaffirm their data dependency. Tomorrow, we will get the latest US Jobless Claims report and much worse than expected data should weigh on Bitcoin due to recessionary fears while much better-than-expected figures are likely to weigh on the cryptocurrency due to risks of more tightening from the Fed. Finally on Friday we conclude the week with the US PMIs data with the same playbook as for the Jobless Claims, that is, weak data is likely to send the markets into risk off and lead to weakness in Bitcoin, while strong data should weigh due to a more hawkish repricing in rates.