Bottom line: Bitcoin long term structure continues to remain bullish against 3850 lows since March 2020. The crypto might be underway to produce a meaningful corrective drop towards 7200-7500 levels until it holds below 12500 resistance.
Fundamental Outlook:
Dow Jones had managed to gain in the past few sessions hitting 27730/50 highs before coming under pressure again. Optimism over another round of stimulus package might have induced the recent rally putting pressure on the US Dollar Index, which dropped below the 94.00 mark yesterday. It would be interesting to see if risk appetite continues to gain momentum.
Bitcoin has slipped to 10750 levels after hitting weekly high around 11000 mark. The crypto remains vulnerable to further drop as US Dollar might gain over the next few weeks. We might witness some strong bids coming in towards 7000-7500 range, going further.
AUDUSD has managed to take off immediate selling pressure after hitting 0.7000 handle over the last week. Since then, the risk associated currency pair has rallied through 0.7150 highs today, alongside global equity markets. The exchange rate might come under pressure again if risk aversion returns.
Technical Analysis:
Bitcoin continues to hold below immediate price resistance at 12000 handle. The crypto had managed to rally towards 11000 levels early this week, before reversing lower again. It trades around 10750 levels as we prepare to publish as bears might be poised to push below 9000 in the near term.
Bitcoin had earlier dropped through 3850 lows, before finding major support. Bulls took control from there and managed to produce a religious rally through 12500 levels. The above rally looks to be an impulse wave, which should ideally be followed by a corrective wave.
Bitcoin bears are looking poised to carve a meaningful corrective wave towards 7200-7500 mark, which is also fibonacci 0.618 retracement of the above rally. High probability remains for a bullish bounce if prices manage to drop through the above support zone.
Most traders might be preparing to initiate fresh short positions around 10700/800 resistance zone, with protective stop above 12500 and potential targets below 7200-7500 levels respectively. Only a break above 12500 would change the above bearish structure.
Prepared by
Harsh Japee, Technical Analyst.
Bitcoin Chart
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