March 28, 2024

Uncertainty and Potential for a Defining Week - Feb 21, 2022 tech analysis

The weekly schedule does not yet give reasons for joy. Several weeks after a potential reversal candleback and strong movement next weekprice drew a (bearish) shooting star and then a long down candle last week. While this is technically a bearish trend, it is important to remember that the 2 green candles we saw ahead of the Shooting Star suggested a chance of a reversal and the potential for continued growth. In this context, the 2 unpleasant last candles do not provide a definite bearish signal.

And in general, technical analysis is rather an educated guess. The rules are not carved in stone and no police enforce them.

Bitcoin has lost support at the moment$42K, as well as $39.6K, which was already tested as resistance on Monday. There are still more than 6 days until the end of the current week, let's see what happens.

Daily chart

</p>

Looks bad.The 50 MA did not provide any support, which is not very common. Additionally, the price dropped below $39.6k yesterday and has already tested this level as resistance at the time of writing.

</p>

Above are the key levels on the daily chart,which seem to be worth keeping in mind. There is still a break in the (blue) downtrend line, and a successful retest of this line as support would technically confirm an exit from it. To be honest, for me these price movements are unpredictable and very unpleasant. In fact, the price drew an “inverted Bart”, rising from the lows, now something resembling a “Bart”, back to the same levels. All this around $39.6K.

</p>

I used to laugh at the use of gapsCME to determine levels, but when the price is trading close, I noticed that every week the gap fills in the first hours of trading. This coincided with a retest of $39.6k as resistance. The CME is down all weekend, creating an inevitable gap in the chart as Bitcoin continues to trade 24/7 on other exchanges. “Nature abhors a vacuum,” and price often seeks to fill these gaps before moving on its way.

4-hour chart

</p>

Here's where it gets interesting.There is potential for a bullish divergence from the oversold RSI on the 4 hours chart - my favorite reversal signal. Confirmation requires RSI to make a larger low, price to make a smaller one, and then both make a clear up move. In such situations, I often consider for myself the option of opening a position with leverage, if all the criteria are met.

You will notice that the entire "bounce" in the past few days has been accompanied by a sustained hidden bearish divergence (shown by the red arrows). It was weak.

Traditional Markets

SPY (SPDR S&amp;P 500 ETF Trust)

</p>

SPY closed the week below the 50 MA for the first time since"Covid" crash of 2020. The Dow did the same, although it had already traded below the 50 moving average a few weeks ago before rising back higher.

This looks like an important moment for the stock market, when the world is on the brink of another war, inflation is accelerating, and central banks are trying to find answers.

I will be keeping an eye on the new weekly candle this week. If we see a further decline, then the likelihood that the situation will change in the near future becomes much less.

Important to remember:charts are not very useful when the market is dominated by macro narratives. Rather, this is a good time to take a deep breath, put on your investor's hat, and start looking for strong assets that are trading at a discount.

 

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.