January 23, 2022

Is this recession different from previous ones? + technical analysis from January 10, 2022

Over the past year, global markets and, in particular, the cryptocurrency market have faced a number of threats that were considered "catastrophic" and which neitherdid not live up to such expectations once. GameStop gamma squeezes, Chinese bans on cryptocurrencies and their mining, expectations of the start of the third world war, negative oil prices, new COVID options, Evergrande, inflation ...

Each of these anomalies became the main themenewspaper headlines accompanied by extremely bearish predictions: "nightmare, unprecedented, crash, bubble, crash, panic." As on a worn-out record, the onset of the financial apocalypse was announced, but invariably postponed until the next time.

The crypto market has outlived all these potentialdistress, but still feels more wobbly than ever before. As in the twilight zone: everything seems to be in order, but nothing goes on as usual. It could probably be even worse if we ourselves were under the sway of the financial apocalypse narrative and with our own hands turned it into a self-fulfilling prophecy, but this is not so. We are in limbo, and the price is falling.

However, regardless of the current state,Long-term investors, in essence, need to answer one simple question: will cryptocurrencies remain in the global financial landscape, and will they play a significant role in it?

And if the answer is "yes", then the current situation is in factactually loses its meaning: eventually it will change, and this decline will turn into a buying opportunity. I do not deny the consequences of the Fed's tightening of policy, nor the fact that the market as a whole has lost almost $ 1 trillion since the beginning of the fall in bitcoin. But in the long run, my investment thesis remains the same. Losing money is always tough, but the market will recover. It always happens that way.

No pain, no gain.

Or:

Overcome the pain, and you will know the benefits.

Markets are designed to test your patience and confidence.

“The stock market is a device for redistributing money from the impatient to the patient.” - Warren Buffett

Experienced players with deep pockets literallydrooling when they feel the fear of the "public". It is during these periods that they actively lay the foundation for increasing their capital by buying out assets dumped by retail players with a short time horizon and lack of patience.

If you are sure that cryptocurrencies have come to ourfinancial world forever, then make it your mantra, regardless of the price movement today, tomorrow or in the coming year. Nobody can take this confidence from you. As long as you find a balance between maintaining your confidence and being open to new ideas, everything else will work by itself. Cryptocurrencies are not going anywhere.

Bitcoin technical analysis

Bitcoin continues to show weakness, with sluggish buying with no clear signs of bullish confidence, even at range lows and breakouts. This not means that the bulls will not enter, but we can only work with what we have at the moment.

Weekly schedule

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The bullish macro trend is still in effect, whichis shown on the weekly chart with a row of blue checkmarks representing larger highs and larger lows. This structure will be broken if it moves below $ 39.6 thousand, although it should also be understood that logically whales may have an interest in going beyond this minimum and provoking massive panic before turning the situation around using the resulting liquidity. At least such a scenario would not surprise me in the least. Despite all this, we have a new bearish trend, with smaller highs and lows, formed from the top of $ 69K. Of course, each low could go even lower, but now we have a confirmed smaller low.

Level $ 53kI defined it as a key one, because it was there that the market broke a local series of lower lows and lower highs from the top at $ 65K. After the breakdown of $ 53K down, the market entered a “bearish phase”. In general, of course, in such a binary coordinate system as a bullish / bearish trend, you always need to keep the timeframe in mind. In the macro perspective, the trend is upward, but on smaller timeframes now everything looks not so optimistic.

Key levels and general vision of the situation,which I shared on Thursday remain the same to me. The market “lost” the key support of $ 42K, but continues to trade directly from it and it still acts like a magnet. Officially, the level has not been retained, and there is every reason to expect further decline. The price broke down the minimum of the previous range, and moved to the next one below it - $ 28-42 thousand.

In the current situation, this does not give confidence thatthe price is now heading to $ 28K. There is a possibility - and hopefully so - that the market will be able to quickly return above $ 42K, but until such evidence of strength arrives, current levels look unfavorable for buying.

Daily chart

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As indicated on the chart, the low of the range wasbroken down, and now acts as resistance. The last two daily candles returned to the intraday range and closed lower. The same is true for today's candle at the time of writing. Buyers are showing themselves weak so far, and this is not too encouraging.

4-hour chart

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Bullish divergence from the "oversold" zone againreplaced by a hidden bearish divergence. In addition, there is something very revealing in this graph that you might not have noticed. The RSI has returned from the "oversold" zone to the 50 level, often perceived as the border between the bullish and bearish RSI signal. More importantly, it "rebooted" to 50, with little or no price hike - tons of effort with minimal price impact. Not the best signal for bulls and another reason to be careful.

To summarize, support is lost, but withoutspecial confidence. The price could still easily bounce back to the previous range, and this would be an important indication of strength from the bulls, however, some unpleasant signs of market weakness are rather worrisome. If such a recovery does not take place, then the prospect of a decline to the minimum of the current range is relevant.

But the main thing to remember is that TA is only a risk management tool. And by itself, it should in no way affect your confidence in the future of the crypto market.

BitNews disclaim responsibility for anyinvestment recommendations that may be contained in this article. All the opinions expressed express exclusively the personal opinions of the author and the respondents. Any actions related to investments and trading on crypto markets involve the risk of losing the invested funds. Based on the data provided, you make investment decisions in a balanced, responsible manner and at your own risk.

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