Bottom line: Bitcoin long term structure continues to remain bullish against 3850 lows. After having print high around 12500 mark, the crypto might be preparing to produce a corrective drop towards 7200/8000 levels in the near term.
Fundamental Outlook:
Dow Jones had rallied towards fresh highs in recent weeks around 28400 mark but could sustain. The indices closed around 28248 levels, -0.15% lower yesterday. The indice might be setting up for heightened volatility as markets face Jackson Hole Symposium the next 2 days. If Fed and other Central Bankers hint towards further stimulus and accommodating stand, global indices might rally further.
AUDUSD had risen and managed to close just below the 0.7200 mark yesterday. The risk related currency pair gained traction along with global indices. Going forward, the exchange rate might come under pressure over fears of another wave of COVID-19 infections in Australia.
COVID-19 infections continue to rise in several European countries including Spain, Italy and France. It is possible that the worst affected nations are facing another wave of the pandemic. The condition might derail global economic outlook in the near term and global indices along with other risk assets might face another round of selloff.
Technical Analysis:
Bitcoin bulls have managed to remain in control since 3850 lows in March 2020. The crypto has produced a religious rally from 3850 through 12500 levels before pullback over the last week. Bears have managed to break below initial support at 11130 levels and should be looking to continue further.
Bitcoin has carved a bullish boundary between 3850 and 12500 levels, which should ideally be retraced before the rally could resume. The fibonacci 0.618 retracement of the above boundary is seen towards 7200 levels. High probability remains for a bullish bounce if prices reach there.
Most traders might be preparing to remain flat for now and look to buy lower towards 7000/8000 mark. Aggressive traders might want to hold short positions with protective stops above 12500 and projected targets below 8000, going forward.
Prepared by
Harsh Japee, Technical Analyst.
Bitcoin Chart
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