Part Two: Bitcoin Spotlight, Technical Outlook, Edition #195 (11/03/2022)
Technical analysis featuring Bitcoin - but make sure to get the latest update on fundamental analysis first... 👇
From bottom to top, and top to bottom…
Bitcoin has market participants on edge right now, and their reasons for being so are thus far substantiated.
Let us start with the elephant in the room.
US President Joe Biden's cryptocurrency executive order!
In the wake of Biden's executive order, relief has come for many as the consensus finally acknowledged the legitimacy of cryptocurrency.
This space isn't going anywhere.
The order itself offered both cryptocurrency fanatics and sceptics some much-needed clarity on where regulations are headed moving forward.
On one end, reports urged regulation not to harm (and even appreciate) the innovation being born within this ecosystem.
However, others noted that enforcement must minimize the risks of digital assets – this includes illicit activity, financial stability, climate, privacy, consumer protection, and global competitiveness.
More importantly, the order introduced new parties to assist with the regulatory framework, such as the Consumer Financial Protection Bureau and Federal Trade Commission.
So it's safe to assume the US wants to reinforce leadership in the Global Financial System and encourage other countries to participate in the digital asset sector.
Whether there is any follow-through from the US is the question. And one that is sure to be followed closely in coming editions.
As if the US clarifying their stance this week wasn't enough for the market, Dubai has also come to the party by introducing their own domestic regulations for digital assets.
Earlier in the year, Dubai imposed harsh penalties for scammers announced in late 2021. This time, new laws were implemented to protect investors and assist in building new global standards.
These operations are to be guided by VARA, the Dubai Virtual Regulatory Authority, an establishment to be formed soon. In addition, every cryptocurrency business in Dubai must be licensed through authorities to promote more responsible growth.
Sheikh Mohammed bin Rashid Al Maktoum had this to say:
"Approving the virtual asset law and establishing the Dubai Virtual Asset Regulatory Authority is a vital step that establishes the UAE's position in this sector a step that aims to help the sector to grow and protect investors."
To conclude, Dubai plans on providing an advanced cryptocurrency ecosystem with international standards. In contrast, the Biden administration seems concerned about more favourable international jurisdictions that would deter investment in the US.
What a mouthful that was… but very important nonetheless.
Time for the real sauce. Technical analysis for Bitcoin.
Bitcoin, $BTC - Weekly (W1)
Going back to Bitcoin's April 2020 COVID crash, practitioners may first draw a Fibonacci retracement from the bottom around US$ 3.8K up to the all-time high of US$ 69K.
With key retrace levels defined, the analysis infers the following deductions:
0.5 Fiboacci Retracement Level: US$ 36,432.48
0.618 Fiboacci Retracement Level: US$ 28,746.62
0.382 Fiboacci Retracement Level: US$ 44,118.34
The current price must hold above USD 36.5K and attempt to retest the 0.382 resistance. Otherwise, a drop to USD 28.8K is inevitable.
Bitcoin, $BTC - Daily (D1)
The daily $BTC chart depicts a very tight range between the 0.382 and 0.5 Fibonacci retracement levels—one could drive a truck through it.
Breaking above US$ 44K could see highs of US$ 53K around the 0.236 retracement level and closing below the 0.5 retracement level at US$ 36.5K could see further selling action down towards US$ 28K.
Both paths have been forecasted, and so has the potential symmetrical wedge (or flag) that is currently forming.
Upon closer inspection, these are nothing but loafers… those pesky .618's!
Bitcoin, $BTC - 4 Hour (H4)
The 4-hour (H4) timeframe offers a more bearish perspective around current levels—see in the region of US$ 38K—where price sits consolidating after rejecting harshly at the 0.618 Fibonacci pivot level, US$ 42k.
If bulls do not hold the line here, then price risks another test of the range lows around USD 36.5K.
Bitcoin, $BTC - 1 Hour (H1)
Bitcoin, $BTC - 1 Hour (H1)
Now, how about the technical update for Altcoins?
Q saves the best for last in Part Three of this asst class miniseries!
If you haven’t already, make sure to catch up on Part One which was dedicated to a view of commodities.
Read last night’s research to get the latest analysis on Industrial and Precious Metals, Crude Oil, and Natural Gas 👇
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See you again for the next update.
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