Bottom line: Bitcoin long term structure continues to remain bullish against 3850 lows, print in March 2020. Over the next few weeks, bears might remain in control as they prepare to push towards 7200-8000 levels. Only a push above 12500 would nullify the above bearish view.
Fundamental Outlook:
Dow Jones has found bids from 27100/200 lows since September 09, 2020. The indice trades above 28000 for now and might face renewed selling pressure around 28500 levels. Further with FOMC today around 02:00 PM EST, it would be interesting to see how indices react to Fed’s economic projections. Interest rates are expected to remain unchanged at 0.25%.
AUDUSD has managed to recover from 0.7200 lows from last week. The exchange rate is trading around 0.7320 mark over strong economic data coming out of China, as we prepare to publish. The US Dollar might be taking its cues from FOMC today and it might continue to gain if risk aversion returns. The risk associated AUDUSD might remain under pressure in that case.
Bitcoin trades around 10900 levels for now and might remain under pressure as the safe haven US Dollar is set to gain over the next few weeks. The crypto currency might find buyers if it reaches around the 7000-8000 mark, going further.
Technical Analysis:
Bitcoin has remained in control of bears since printing 12470 highs in the past few trading sessions. The crypto might be carving a meaningful corrective drop towards 7200 levels, before resuming its long term rally. Intraday rallies might remain capped below 12500 levels as bears looking poised to stay in control over the next few weeks.
Bitcoin faces immediate resistance around 12000, followed by 12500; while support comes in around 9000 mark respectively. A break below 9000 levels would add further confidence to the bearish setup and open doors for a push towards 7200 levels going further.
Bitcoin bulls have managed to stay in control since 3850 lows in March 2020. The crypto has managed to carve a series of higher highs and higher lows through 12470 levels. The entire rally between 3850 and 12470 looks like a potential impulse wave, which should be followed by a corrective drop.
The above proposed corrective drop might be underway and could reach towards 7200 levels which is fibonacci 0.618 retracement of the entire rally between 3850 and 12500. High probability remains for a bullish bounce if prices manage to reach there.
Most traders might be inclined to hold short positions taken earlier around 12000 levels, with protective stops above 12500 and projected targets towards 7200 levels respectively. A consistent break above 12500 mark might change the near term bearish outlook.
Prepared by
Harsh Japee, Technical Analyst.
Bitcoin Chart
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