Bitcoin Futures (BTC1) – Long-term technical picture at risk of a major downgrade

Bitcoin Futures (BTC1) – Long-term technical picture at risk of a major downgrade

Posted on Monday, May 9 2022 at 9:08 pm GMT+0000

Following the disappointing April, Bitcoin Futures (BTC1) started May on the wrong foot, extending the consecutive weekly losing sessions to six, deteriorating the broad outlook. Adding to the overwhelming negative pressures, this week’s downside gap of 4.10% – the largest since last November – sent the crypto-king below the critical 33,000 bottom, skyrocketing the last 24 hours liquidations to more than $212.50 million, with 85% being on the north side of the market.

Bitcoin plunged last week amid escalating fears about a more hawkish policy tightening cycle even as Chairman Jerome Powell took 75-basis point rate hikes off the table, fading well below the Ichimoku lines which remain negatively aligned, indicating that bearish forces are prevailing. Noteworthy, the Kijun-sen line ticked lower after remaining flat for almost 4 months.  Glancing at the oscillators, both the RSI and the MACD are promoting strengthening negative impetus. The RSI continues to drift lower in the bearish region below its January lows closing in at the 30 oversold threshold. The MACD is losing steam below both its signal and zero lines.

As things stand, the flagship cryptocurrency is expected to experience further losses in the forthcoming sessions, specifically following the recent dip below the January low of 33,000. All eyes are currently turned towards the key 30,000 – 28,800 support section molded by the lows posted in May and July 2021. Breaching that floor will confirm additional declines towards the 161.8% Fibonacci extension level of the January to March up-leg at 23,500. More bearish developments will shift focus to the inside swing high of December 2017, at 20,650.

In the opposite scenario, a bounce in the price would initially pause around the 37,100 level. A bit higher, buyers could meet the Tenkan-sen line of 40,400 and the lower surface of the cloud. Generating more traction, they may then target the March high of 48,500 and the adjacent Kijun-sen line around 49,500.

In brief, Bitcoin is in a bearish situation for another week. Any dip below the 30,000-28,800 support region will further downgrade the long-term technical picture accelerating the sell-off.