Bottom line: Bitcoin long term structure continues to remain bullish against 3850 lows since March 2020. The crypto has managed to hit major resistance around 12500 mark and might be on its way to produce a meaningful corrective drop towards 7200 levels, going further.
Fundamental Outlook:
Dow Jones had managed to close around 27312 mark yesterday, higher by +0.57%, after dropping to 26712 levels the day before. As risk aversion gathered pace during the last few trading sessions, US Dollar Index has risen through 94.20 mark. Global equity markets along with Dow Jones might find some bids in the next few days but another stronger wave of continued risk aversion might be underway soon. Investor sentiment might remain fragile over the next several weeks.
AUDUSD continues its selloff hitting 0.7115 lows as we prepare to publish. The risk associated currency pair has erased over 300 pips from its 0.7413 highs on September 01, 2020. The exchange rate shall be taking its cues from global equity markets going further. It might see some bids coming through over the short term though.
Bitcoin remains vulnerable to further losses as the US Dollar continues to gain. The crypto traders around 10400/50 levels as we prepare to publish, lower by around 1500 points from its September 01, 2020 highs. Might bids might be seen below 8000 levels, going further.
Technical Analysis:
Bitcoin remains in control of bears since hitting resistance around 12500 levels in August. The crypto might have carved yet another lower high around 11200 mark recently. Bears might remain poised to push prices lower towards 7200 levels in the next few weeks.
Bitcoin overall structure remains constructive for bulls since hitting 3850 lows in March 2020. The crypto has managed to rally through 12500 levels, carving a series of higher highs and higher lows. Also, the rally seems to be an impulse wave that should be ideally followed by a corrective wave.
Since printing 12500 highs in August, Bitcoin has remained in control of bears and might be underway to produce a corrective wave potentially towards 7200/7500 mark. Also note that fibonacci 0.618 retracement of the earlier rally is seen through 7200 levels respectively. High probability remains for a bullish bounce if prices manage to reach there.
Most traders might continue holding short positions through resistance zone around 11200/300, with protective stops above 12500 and projected targets below 7200 respectively. Only a break above 12000 and subsequently above 12500 would change the bearish structure.
Prepared by
Harsh Japee, Technical Analyst.
Bitcoin Chart
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