The crypto sell-off threatens to widen

Bitcoin (BTC): Renewed price weakness is emerging

BTC rate: $21,725 ​​(last week: $21,725)

Short-term resistances/goals: $20,478, $20,779, $21,691/$21,892, $22,130, $22,834, $23,632, $24,816, $25,498, $26,696/$20,696/$25,696, $7,292.

Short-term support: $19,881/19,720, $19,513, $19,212/18,950, $18,604, $17,909/17,567, $16,180, $14,838, $14,311, $13,858

4-hour chart Price analysis based on the value pair BTC/USD on Coinbase

Summary of Bitcoin

  • As a result of the classic stock market sell-off on Friday, the price of the key cryptocurrency fell short of the 2017 record high of $19,881 at the end of the week. At its peak, the Bitcoin price corrected to USD 19,513 before the bulls were able to stabilize the price.
  • Drastic statements by US central bank chief Jerome Powell about the Fed’s interest rate policy in the coming months had initially led to a drastic sell-off in global stock indices. Within hours, about 2 trillion US dollars in market capitalization had been wiped out on the major stock markets.
  • The US dollar index DXY then rose to a new 20-year high. The continued strength of the dollar has had an increasingly negative effect on the price performance of the US stock indices and the crypto market in the last few months of trading.
  • According to COINMETRICS, the correlation between the world’s largest stock index, the S&P500, and the key cryptocurrency has increased significantly recently and is currently at an annual high of nearly 0.7.
  • Yesterday, Monday August 29, BTC price initially bounced back above $20,000 and was able to close the future price gap (CME gap) of $20,470 that developed over the weekend this Tuesday morning, but so far has it has been enough for more Not.
  • In the last few minutes of trading, Bitcoin is showing renewed weakness, falling back below the $20,000s following the release of better-than-expected US consumer confidence along with a sharply declining Nasdaq100.

These price tags become relevant

  • As long as the BTC price cannot sustainably climb back above the USD 20,478 resistance, the price rally can only be considered a technical recovery.
  • If BTC overcomes this area, the next relevant resistance is already waiting at USD 20,779. This is the tail end of the August 26 sale.
  • If a breakout above multiple resistance in the USD 20,800 area succeeds, the gaze should be directed towards the turquoise zone between USD 21,691 and USD 21,892 in the short term.
  • On the other hand, another drop below the historical low of USD 19,513 should lead to a directional decision at USD 18,950. A dynamic break below this key support would result in an immediate retracement to the year low area of ​​$17,909 to $17,567.
  • An increase in volatility can be expected by the end of the week at the latest. On Friday, the NFP jobs report will be released in the US. You can read in the current overview article which other economic data are likely to be relevant to the price development this week.
  • The renewed price weakness in the last few trading days capped the Fear and Greed Index in the “fear area” to currently 27. For now, however, the fear barometer appears to be leveling out in the zone between 25 and 30. It remains to be seen whether continued price consolidation will get the index to correct back into extreme fear territory.

That’s what the indicators say

  • After the RSI fell back into the oversold territory at the end of the week on Sunday, the RSI in the 4-hour chart is currently showing a sell signal again. On the other hand, the MACD indicator still has an active buy signal, but threatens to turn it into a new sell signal in the near future.
  • In the daily chart, both indicators continue to show sell signals. However, a bullish price divergence formed in both timeframes over the weekend.
  • This difference between higher lows in the indicator and lower lows in the price chart prompted brave investors to invest more in Bitcoin again at the beginning of the week.
  • Looking at the weekly chart, the RSI is trending below the neutral zone between 45 and 55 with a value of 35 and has yet to give a sustainable signal. On the other hand, the MACD still has an active long signal. Overall, therefore, the indicators have a supportive effect on the Bitcoin price.

Bullish Scenario (BTC)

  • The Bitcoin bulls were able to prevent the total crash so far. In the short term, the buying camp now needs to form a higher low in the USD 19,726 area. At most, a short rise on the weekly low would still be manageable.
  • However, to generate further upside potential, it is first necessary to break through the USD 20,478 resistance to rise again to the breakout edge in the USD 20,779 area.
  • Here, with the Supertrend, the EMA50 (orange), the price limiting downward trend line and the 23 Fibonacci retracement of the current price movement, there is a whole bunch of price obstacles.
  • If the bulls manage to regain this very strong resistance area in the coming days, a follow-up rally above USD 21,373 against the highs of the previous week can be expected.
  • The turquoise resistance zone represents a real test.
  • Only if the buying camp manages to lift the Bitcoin price back above the turquoise resistance area at the end of the day with increasing trading volume will there be further price potential to the north.
  • If Bitcoin rises back above USD 22,130 towards USD 22,435, resistance from the bear camp should again be planned for this price tag.
  • If the BTC price does not ricochet south and can then stabilize above this price level, the next relevant price target awaits at USD 22,834. Investors will realize more profits here.

First direction decision can be expected

  • Only when the Bitcoin price estimates itself above USD 22,834 again will there be a tentative decision in the USD 23,238 area. In addition to the higher level 38 Fibonacci retracement, the golden pocket from the last price move runs here as well.
  • This area represents the maximum price target for the coming trading days.
  • Only a dynamic recapture would enable the march to USD 24,291.
  • If this resistance level can also be recovered in the coming weeks, massive resistance from the bears can be expected in the zone around $24,816 at the latest.
  • Here is the 23 Fibonacci retracement of the full drawdown. Any escape attempts have been abruptly halted here in recent weeks.
  • However, this price level must be overcome in the long term to unlock further growth potential.

Bulls need to confirm the sustainability of the trend move with more bitcoin purchases

  • Only when the historical high of USD 25,214 to the daily closing rate is overcome will there be further price potential for Bitcoin.
  • In particular, the $26,170 mark represents an important target zone.
  • A tentative decision for the coming period can be expected at the 61 Fibonacci retracement at USD 26,734.
  • If the buying side stabilizes the Bitcoin price above this price level, the initial maximum target range between USD 27,696 and USD 28,104 will appear.
  • From the current chart view, a retracement above USD 30,000 is not expected, trading volume for Bitcoin is currently too low.

Bearish Scenario (BTC):

  • The bears are still not giving up and are using any weakness in the US stock indexes to sell out.
  • In the last hour of trading alone, the sell side liquidated about $20 million in leveraged long positions.
  • As long as the BTC price remains capped below USD 20,779 in the coming trading days, a retest of the historical low of USD 19,510 can be expected at any time. If this support is broken, the correction will immediately extend towards the yellow support zone at $19,000.

Looking towards new annual lows

  • If the BTC price does not stabilize here and the USD 18,950 support is also broken, the probability of a return to the annual low increases significantly.
  • Although there is further support at $18,604 and $17,909, whether the bulls initiate another reversal attempt will largely depend on the economic data in the coming trading days.
  • If the buyer side lets the last chance for a northward reversal pass, the retest of the yearly low at USD 17,567 awaits.
  • A break of this last support looks increasingly likely and should add to the selling momentum once more.
  • As a result, a quick sell-off of up to USD 16,180 is conceivable.
  • This also increases the likelihood of a march through to the maximum bearish target range between USD 14,837 and USD 13,858.

Disclaimer: The price estimates presented on this page do not represent buy or sell recommendations. They are just an assessment by the analyst.

The map images are made using TradingView created.

USD/EUR exchange rate at time of printing: EUR 1.00.

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