Bitcoin futures (BTC1!) – Exposed to further bearish developments

Bitcoin futures (BTC1!) – Exposed to further bearish developments

Posted on Monday, May 16 2022 at 9:39 pm GMT+0000

Bitcoin futures (BTC1!) came under tremendous selling pressures in the previous couple of months, printing 7 red consecutive weekly candles. The flagship cryptocurrency is now traded 57% lower from its ATH, while during the previous week it fell as low as 25,400, its lowest since December 2020. It kicked off the new week with a desperate attempt to heal some wounds particularly with a positive gap of 3.85%, but swiftly flipped lower, setting sail for a new bearish candle record, increasing the last 24 hours liquidations to more than $208.59 million, with 58.36% being on the north side of the market.

Bitcoin is currently hovering around the 30,000 – 28,600 congested area of lows posted between May and July 2021, well below the negatively aligned 20- and 50-week exponential moving averages, indicating that the technical picture could witness further deterioration. Additionally, the oscillators are backing that view, as the Awesome Oscillator is declining in the bearish territory, below its previous lows, and the negatively charged Stochastic, whose %K line has pierced into oversold territory, are still not showing any signs of abating yet.

Last week’s violation of the aforementioned support base saw a massive surge in trading volume, confirming the breakout, with the sell-off hitting the 4/1 Gann angle stretched from the March 2020 bottom before cooling somehow. Diving deeper past this line and the 25,400 low, the bears will confront the 161.8% Fibonacci extension level of the January to March up-leg at 23,500. Another victory here will increase their confidence to push through the support 20,650 barrier, taken from the inside swing high of December 2017, and towards the 8/1 Gann angle.

However, on the upside, the bulls will need initially to secure a clear close above the congested resistance zone formed between the 3/1 Gann angle and the January 24 bottom of 33,000, to get back to the fight. In that case, the attention may shift to the 37,100 level, before the 39,800 – 41,600 region encompassing the 20-and 50-week exponential moving averages. Crossing above the latter zone, the price advance could then stretch to the crucial March top of 48,500.

All in all, Bitcoin remains exposed to further bearish developments despite its resilience around 30,000 – 28,600, as it has not shown any clear signals for bullish corrections.