Jump to content

Bitcoin (BTC) Key Levels to Watch

Recommended Posts

BTC, Analysis and News

  • False Break Through 40k Could Prompt Short-Term Bullish Rebound in Bitcoin

Bitcoin (BTC), Ethereum (ETH) – Collapsing Into Multi-Month Support as  Sellers Triumph

Following a soft week on Wall Street, Bitcoin as well as other cryptocurrencies have also come under pressure. A reminder that Bitcoin is a risk-on asset or in other words a liquidity haven, the pre-Covid view that Bitcoin was a safe-haven had been well and truly debunked when Bitcoin had cratered during the Q1 2020 sell-off. Thanks to the global central bank and government largess, the crypto space has been among the top performers of the “buy everything rally”. Therefore, with the Federal Reserve talking up balance sheet normalisation to come much sooner than many had expected, the potential near-term withdrawal of liquidity poses a threat to the crypto space and likely what we are seeing now, is cryptos discounting that future withdrawal of liquidity. The chart below provides a reminder as to how Bitcoin performed during QT in 2018. Admittedly, this is just a sample size of 1, not to mention it also came after a blow-off top at 20k. However, with institutional involvement much higher now than in 2018, macros matter more than ever before.

Bitcoin Performance During 2018

Bitcoin (BTC), EUR/USD, USD/CAD Key Levels to Watch

Source: Refinitiv

False Break Through 40k Could Prompt Short-Term Bullish Rebound

Taking a look at the chart, the major focus for Bitcoin is on the psychological 40k handle. While holding off for a break below over the weekend, having hit a low of 40.5k, with equities beginning to come under pressure, we can expect another test of 40k. That being said, for those who remain a Bitcoin bull, it would be preferable for a false break below 40k, much like what we have seen previously at psychological levels.

Bitcoin (BTC), EUR/USD, USD/CAD Key Levels to Watch

Source: Refinitiv

Jan 10, 2022 |  Justin McQueen, Strategist. DailyFX

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Posts

    • Sainsburys full year earnings and Unilever’s first quarter trading update both say the same thing, UK consumers are in for higher prices. The war in Ukraine, supply chain issues and the effects of ongoing Covid all to blame.      
    • US Dollar (DXY) Daily Price and Analysis US Q1 GDP may stall the greenback’s advance. A 20-year high nears for the US dollar. The multi-month US dollar rally continues with the greenback printing a fresh high today ahead of the first look at US Q1 GDP at 12.30 GMT. The US dollar basket (DXY) has been boosted by renewed weakness in the Euro and the Japanese Yen, as investors move from lower-yielding to higher-yielding currencies, while safe-haven flows continue to benefit the greenback. The US growth release later in the session is expected to show a sharp slowdown from the robust Q4 figure of 6.9%. The markets are currently pricing in growth of just 1% for the first three months of this year, with the slowdown mainly due to a reduction in inventory accrual over the quarter. This release is unlikely to move the greenback, unless there is a large miss or beat, as the Fed believe that 2022 US growth will be robust enough to let them tighten monetary policy sharply without damaging the economy. The latest US Core PCE data – the Fed’s preferred inflation reading – is released on Friday and this may have more effect on the US dollar than today’s GDP data. For all market moving economic data and events, see the DailyFX Calendar. The ongoing US dollar rally has been aided by weakness across a range of G7 currencies including the Euro, the Japanese Yen, and the British Pound. The Euro continues to battle with lowly growth expectations, exacerbated by energy concerns, the British Pound is mired by weak economic data, while the Japanese Yen is in freefall as the BoJ continues with its ultra-loose monetary policy.   The US dollar continues to press higher and looks set to break above 103.96, the March 2020 high. Above here the US dollar would be back at levels last seen nearly two decades ago. The March resistance will likely hold in the short-term, especially with month-end portfolio rebalancing at the end of the week, but US dollar strength is set to continue in the months ahead. USDOLLAR (DXY) WEEKLY PRICE CHART – APRIL 28, 2022 {{THE_FUNDAMENTALS_OF_BREAKOUT_TRADING}} What is your view on the US Dollar – bullish or bearish?   Apr 28, 2022 | DailyFX Nick Cawley, Strategist
    • While Tesla has nothing directly to do with Elon Musk buying Twitter - TSLA stock closed down 12% on news that Musk may have to sell stock and use other holdings to stand against the loan to finalise the purchase of the social media giant.        
  • Create New...