Bitcoin (BTC) – Still at risk of further deterioration

Bitcoin (BTC) – Still at risk of further deterioration

Posted on Wednesday, December 7 2022 at 9:06 pm GMT+0000


Bitcoin (BTC) has been struggling to stretch the recent positive legs from a fresh two-year low of 15,400 towards the 23.6% Fibonacci retracement level of the August – November downtrend.

The medium-term outlook is still obviously gloomy, despite the recent stall in the negatively-skewed structure. Although the southwards slope of the 20-day simple moving average has eased lately, the diving 50- and 100-day simple moving averages are dictating the broad bearish picture.

Meanwhile, the oscillators are suggesting that negative momentum has jump started. The RSI shifted south after failing to overcome the 50-neutral threshold, the momentum oscillator is ready to cross beneath the zero mark, and the stochastic oscillator is fading from the overbought zone, after posting a bearish crossover.

Following a decisive daily close above the 20-day simple moving average, sellers will push to rechallenge the 15,600 – 15,400 band shaped by the November lows. A dive past that base will unleash another bearish wave towards the 14,000 area, taken from the 2019 peak, while a steeper decline could last until the 12,500 mark related to the August 2020 top.

On the flip side, if buyers create traction off the aforementioned moving average, initial upside constraints could transpire between the 23.6% Fibonacci level at 17,700 and the September low at 18,200. If this critical zone which includes the 50-day simple moving average fails to curb positive developments, the rally could slice the 100-day moving average and stretch towards the 20,000 key zone. Should sturdy bullish forces navigate beyond that too, the November 5th top could come under examination.

Summarizing, Bitcoin’s newfound positive traction over the last couple of weeks seems to be running on fumes as bearish forces weigh. Negative impetus may speed up with a dip below the 20-day simple moving average. Yet, for some meaningful recovery to unfold, the price would need to improve over the 17,700 – 18,200 region.