The technical
picture for Bitcoin is getting more and more complicated, but this does not necessarily
provide any signs of a changing trend. A huge downside wedge with the upper
margin drawn from $69,000 (all-time high of 2021), $48,000 and $19,000 suggest
that Bitcoin prices may go down to $4,000 per coin. Prices spiked last week towards
the upper margin and this could mean that bears could begin to collect
stop-losses and leave bulls without any steam before storming the support level
at $18,000-19,000.
The narrow
price channel has been formed with the support at $18,250 and the resistance at
$20,450. A breakthrough of the resistance occurred amid the weak upside wedge
formation. This could be a temporary growth but a false bounce from the global
downside wedge has been confirmed. The nearest downside target is at $18,000
per coin, down to $13,000.
Digital
asset prices have a strong correlation with risky stocks that are currently
rallying in the U.S. amid hopes for a lower trajectory of the Federal Reserve
(Fed) interest rates hike. It is worth remembering that investors were regularly
let down after feeling exaggerated enthusiasm. So, the feeling of
discouragement may surface again.
Any
justified reasons for the optimistic environment to switch to one of where
risks can be seen to be taken are simply not present amid high inflation in the
U.S. and stagflation in the Eurozone. The Fed could score some extra points for
Democrats before the elections on November 8 by slowing down interest rate
hikes. But U.S. President Joe Biden has continuously shared the point that he
will not interfere with the Fed’s decisions.
It is worth
noting weak Q3 2022 financial results of U.S. listed companies. Only Apple and
Microsoft delivered relatively strong results, while most of the other tech
giants suffered from a strong U.S. Dollar and the slowing down of economic
activity. It is very hard to remain optimistic now and believe in the swift
economic recovery, and a rebound in the stock and crypto market. So, the time to
remain bullish within the crypto market has not come.