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Monday, May 22, 2023

Bitcoin: path to oversold side

Bitcoin: path to oversold side

Bitcoin / U.S. dollar BITSTAMP:BTCUSD

The debt ceiling saga and uncertainties over next Fed`s moves when monetary policy is in question have put financial markets on a sort of hold during the previous week. The dooms-day scenario was noted by the Treasury Secretary Yellen in her speech in Congress during the previous week, in case that agreement about the debt ceiling is not accomplished. Certainly, markets don’t like to hear such stuff from Government officials. In this sense, the majority of investors are currently on hold, waiting for a clear signal in order to enter into position, while some of them tried to diversify investments by moving funds to EU equities. Bitcoin also gained during the previous week, but it was a rather weak gain of some 0.4% w/w. Total volumes on the crypto market are dropping for the last two weeks, indicating that the market is exhausting itself at the current stage. The new influx is necessary in order to move markets to one side and increase its volatility.

BTC was traded in a relatively low range during the previous week. The highest weekly level was $$27.7K, while lowest was at $26.3K. The majority of conducted trades were around level of $27K. Short term stop for BTC at $28K has not been tested during the week, which indicates potential that BTC did not finish its road to the downside. It is also confirmed through RSI, which was moving around level of 40 during the week. It is clear that investors are still more oriented toward the oversold side, which might be reached in the coming period. Moving average of 50 days stopped its divergence from MA200 counterpart and is currently moving parallel to it. At this moment it is too early to say whether the indicators might start their route toward the so-called “dead cross” in technical analysis.

The short-term road toward the 25K support line was clearly open two weeks ago. During the previous week, BTC did not manage to test a short term stop at $28K resistance, and continued with pressures toward the downside. The probability of reaching the support line at 25K has increased. However, as per current charts, there is some probability that the BTC will try to test a short term stop at $28K one more time, before it finally reverts to the downside and levels modestly above $25K.

Via TradingView Ideas

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