After the
news of BlackRock filing a Bitcoin ETF on June
15th, we saw the cryptocurrency surging in value going briefly from the 25K
level to the 31K one. Bitcoin resilience has been remarkable given the hawkish
repricing in interest rates expectations and the regulatory crackdowns we saw
in the past weeks/months. The struggle to break above the 31K level though suggests
that we might be at a point where if the risk sentiment turns negative, Bitcoin
can selloff pretty hard. In fact, despite the positive risk sentiment in the
markets due to the miss in the US CPI report
and the soft-landing vibes, Bitcoin couldn’t rally. This is a worrying sign.
Bitcoin Technical Analysis
– Daily Timeframe
On the daily chart, we can see that after breaking
above the trendline and
rallying into the 31K resistance, Bitcoin
stalled and started to range just beneath the level. The moving averages have
crossed to the downside, but they are not reliable in rangebound markets. It
looks like we will need some big fundamental catalyst to make it breakout on
either side.
Bitcoin Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more closely the
range created between the 29500 support and the 31000 resistance. The best
strategy would be to just sit and wait until we get a clear breakout supported
by a fundamental catalyst, but more aggressive traders can “play the range” by
buying at support and selling at resistance.
Bitcoin Technical Analysis
– 1 hour Timeframe
On the 1 hour chart, we can see that we
have a mid-range level that acted as kind of a sentiment line where the bias
becomes more bearish below the level and more bullish above it. In fact, we
should see the buyers leaning on the 29500 support to target the resistance and
the eventually the breakout, but we should also see more buying pressure as
soon as the price rises above the sentiment line. Conversely, the sellers are
likely to lean on the resistance to target the break below the support, and
then increase the selling pressure if the price falls below the sentiment line.
Upcoming Events
The next data to watch will
be the US Jobless Claims report on Thursday. Given the current soft-landing
narrative, a small miss to the expectations shouldn’t cause much damage and in
fact an eventual spike might be faded soon after. A big miss, on the other
hand, should give the markets recessionary vibes again and lead to more
weakness in Bitcoin. Conversely, a big beat should support the idea of a soft
landing and support the cryptocurrency.
This article was written by FL Contributors at www.forexlive.com.