Analisis Forex & Kajian: 10.10.2022 - Bitcoin continues to...

10.10.2022 11:31 PM

Bitcoin continues to consolidate below $20k: is it worth waiting for a breakthrough?

As a result of the weekend, the price of the first cryptocurrency remained practically unchanged. As of October 10, bitcoin was moving near the $19.2k level. Changes in the price of the asset over the past seven days are 0.84%, which speaks to some facts about the current state of BTC.

Bitcoin weekend

The most important and at the same time the saddest thing is that trading volumes remain at a low level. Weekend trading activity fell to lows in the $20 billion region, which was expected. The abnormal growth of trading on some crypto-exchanges did not justify itself and no cardinal changes in the price movement were observed.

The $19.2k level is the main bitcoin support zone, which has remained untouched for the second consecutive week. This is largely due to the appeal of the $19k-$20k range for both retail and institutional investors. Accordingly, the level of $19.2k may become the second bottom of the market, after which the growth of bitcoin will resume.

Negative news continues to come from miners. Argo has said it is selling shares, BTC and other assets to cope with its debt load. The mining company said it is gradually selling off 3,400 bitcoins to pay off debts and sustain itself. Representatives of Argo Blockchain stated that it is about survival, not profit.

S&P 500 analysis

The main ally of bitcoin in the fall of SPX continues to decline. The asset is gradually approaching the retest of the $3,500 support zone, which has been the bottom of the market since December 2020. A breakdown of this indicator will lead to a painful fall, which will affect the quotes of bitcoin and other stock indices.

The technical metrics of the asset indicate the continuation of the bearish dynamics and at least a retest of the $3,500 level. RSI and stochastic are going into a steep downward peak, and the MACD indicator is approaching the formation of a bearish crossover. In general, the situation around the S&P 500 index is becoming more and more alarming.

DXY Analysis

It's been two weeks since the US dollar index hit a local high at 114. Markets were expecting a serious corrective move. The situation was sweetened by the appeal of the UN to the central banks with a request to stop the aggressive monetary policy. The crypto market was in anticipation of growth after the start of the DXY correction

However, Federal Reserve Chairman Jerome Powell uncompromisingly said that the department will maintain the current policy to combat inflation. Over the next few days, DXY began to rise in price, and as of October 10, the index reached 113. Consequently, stocks and cryptocurrencies continue to bottom under intense pressure from DXY.

BTC/USD Analysis

In fairness, it should be noted that bitcoin continues to "break relations" with the SPX index. While the stock indicator goes to the bottom, bitcoin stands still. On the one hand, this may indicate a drop in the correlation between financial instruments. Also, the weakening of the correlation may be the result of a drop in trading volumes in the market.

A "triangle" figure is forming on the daily chart of bitcoin, the price is tightening. At the same time, trading volumes remain at a low level, and therefore, the price will go beyond the range in the second half of the week.

Technical indicators on the daily chart do not indicate a single direction for price movement. Given this, it is necessary to wait for the opening of the US markets and follow the movement of stock indices.

However, even now we can say that with low buying activity, bears are not able to push the price below $19.2k. This hints at the weakness of the bears, and therefore this week we should expect at least a movement of BTC to $20k. If it settles above the downward trend area, growth may continue to $23k.

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