It is not too late for Bitcoin (BTC) to regain its bullish bias as it half paints a hesitant Doji light on the weekly chart.
In detail, this week’s Bitcoin price correction below $33,000, if it were a weekly low, indicates that the bulls have bought the dip. This was followed by a strong bounce that lifted the price of BTC to $38,960 on January 27th. That being said, the bulls failed to hold the mentioned weekly high for a long time, leading to another week but also pointing up.
Weekly Bitcoin/USD price chart with doji candlestick. Source: Trading View
Since then, the price of BTC has corrected and approached the opening week price of $36,200. By doing so, you have formed a transitional candle called “Doji”, which reflects the indecision between bears and bulls. If they are at the bottom of a trend, Doji candles may indicate a price trend reversal.
The grant is still $30,000.
Bitcoin’s trend has been declining since hitting a high of $69,000 in November 2021. Thus, the cryptocurrency lost more than 50% of profits, even dropping below the 50-week exponential moving average (EMMA). The 50-day exponential moving average (red wave) is an important support level.
But Bitcoin’s strongest temporary support comes at $30K, a level that has capped the cryptocurrency’s attempt down since January 2021. Especially in May-July 2021, this level helped to attract the backlogs that helped Bitcoin rise to all-time highs.
Crypto Batman market analyst noted, “If support continues around $30K, we could see a strong resumption of the uptrend.”
Weekly BTC/USD price chart. Source: Trading View
In addition, the formation of a doji before the price of BTC reached the $30,000 support shows the weakness of the downtrend near the level.
Bearish Outlook
On the other hand, the bullish outlook for Bitcoin could worsen if the price falls well below $30,000.
In particular, Bitcoin’s weekly RSI is currently around 38 and it is still heading towards the oversold zone below 30. This indicates that the price of BTC could still continue to decline in the upcoming sessions, at least until she won’t test $30,000.
Weekly BTC/USD price chart. Source: Trading View
Meanwhile, approaching below $30K puts Bitcoin at risk of a fall towards the 200-week exponential moving average (200-week exponential moving average; blue wave in the chart above) near $25,000. This is mainly due to the history of the end of bearish wave cycles in 2018 and 2019, followed by sharp pullbacks to new highs.
Fundamentals Support Negative Scenario
Bitcoin has fluctuated between highs and lows this week amid tension over plans to raise interest rates by the Federal Reserve for 2022 to fight inflation. On Jan. 26, the rise in crypto disappeared after the US Federal Reserve confirmed it would raise interest rates in mid-March.
Jerome Powell’s press conference following the announcement highlighted the possibility of the Fed raising interest rates after every policy meeting for the rest of the year. The Fed chief acknowledged that inflation expectations had worsened since their December political meeting and stressed that persistent supply chain problems may not be resolved by the end of 2022.
Bitcoin fluctuated hours before the Fed announcement and during the Powell conference on the afternoon of January 26th. It briefly jumped to nearly $39,000 after the central bank announced its policy decision, but began to decline after Powell began talking to reporters later. afternoon.
Independent market analyst CryotoBirb downplayed concerns about the Fed’s austerity policies, noting that the central bank would not take a “subversive approach to financial markets.”
Related: is there a bottom? Data Shows Bitcoin Derivatives Entering Failure Zone
The chart notes that a Fed-led stock market crash would look bad on policymakers, which could give the central bank the opportunity to induce “short-term bearishness” in risky markets, followed by strong gains over the medium term.
“It’s also worth adding in a broader context that Bitcoin has been using stocks recently, and although stocks have fallen, Bitcoin has taken over,” he added.
