Bitcoin remains rangebound on a key support level as the outlook is turning more and more bearish given the headwinds from global growth and tight monetary policies. All the positive news eventually gets faded, which is another sign that the big picture trend remains bearish. Amid this high uncertainty, the technicals can help with risk management and short-term directional plays.
Bitcoin Technical Analysis – Daily Timeframe
On the daily chart, we can see that Bitcoin recently sold off into the key 25231 support where it bounced soon after. The price then rallied into the red 21 moving average where it found strong sellers. The bias remains bearish as the price keeps on printing lower lows into the support, which should eventually lead to a breakout. If the price breaks above the 21 moving average though, we might see a rally back into the 28400 resistance, where the sellers will be waiting to sell at even better prices.
Bitcoin Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we are currently trading withing a range between the 25231 support and the 26600 resistance. The best strategy in such instances is to just sit tight and wait for a breakout, but one can also “play the range” by buying at support and selling at resistance. A break to the upside should take Bitcoin into the 28400 resistance, while a break to the downside should lead to a selloff into the 21509 support.
Bitcoin Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a level of interest at 26024. In the short term, we might see a rally into the 26600 resistance in the price breaks above it, but the sellers are likely to pile in here with a defined risk above it to target the 25231 support.
Upcoming Events
This week we have many important events. Today is the US CPI Day, which is expected to show an increase in headline inflation due to higher energy prices but further disinflation in the core measure. Tomorrow, we will see the latest US Jobless Claims, PPI and Retail Sales data. Finally on Friday, we get the University of Michigan Consumer Sentiment report. Strong data is likely to tip the market expectations on the more hawkish side and support the USD, ultimately weighing on Bitcoin. On the other hand, weak readings should have the opposite effect, unless they are very bad, in which case the recession fears are likely to send Bitcoin lower anyway.
