Bitcoin eventually fold as the big picture outlook is starting to look more and more bleak with global growth endangered by the Chinese ailing economy and lack of big stimulus from the authorities, and the “higher for longer” stance from the Fed or even more rate hikes. The resilience in the cryptocurrency has been remarkable in the past months, but we might be at a tipping point now.
Bitcoin Technical Analysis – Daily Timeframe
On the daily chart, we can see that Bitcoin fell below the trendline support where we had also the 50% Fibonacci retracement level for confluence. The price has eventually bounced on the strong support at 25231 but it’s starting to look more like a “dead-cat bounce” rather than a start of another rally. The buyers, nonetheless, are likely to pile in here with a defined risk below the level to target new highs.
Bitcoin Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that if we get a bigger pullback, the most likely resistances will be the 38.2% Fibonacci retracement level and the stronger 61.8% level where we have also the broken trendline. More conservative sellers may want to just wait for the price to fall below the 25231 support to pile in and ride the selloff into the 21509 level.
Bitcoin Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a minor resistance at 26300 where the price got rejected multiple times. So now we have a range between the 25231 support and the 26300 resistance. A break on either side should lead to a more sustained move.
Upcoming Events
This week is pretty empty on the economic data side as we will only have the PMIs today and the US Jobless Claims tomorrow. Strong data should support Bitcoin in the short term, but the prospects of more rate hikes might weigh on the cryptocurrency soon after. Conversely, weak data is likely to cause some recessionary fears in the markets leading to negative risk sentiment and eventually weighing on Bitcoin. Remember also that this is the Jackson Hole Symposium week, so we will hear from many central bankers including Fed Chair Powell, who is set to speak on Friday.
