BTC showing strength but at strong resistance

2022年5月5日

So the FOMC rate hike of 50bps last night had an immediate positive impact on crypto and traditional markets. There was allot of fear in the markets and the Fed has provided a pressure relief valve.

Traders should remain cautious however as a number of key technical hurdles remain before we can release the bulls! A convergence of technical indicators at the same level always makes them more significant, particularly if they are indicators that many market participants trade off.

The key resistance levels in play are:
1) We have fallen below the bear channel (see dotted lines on chart) that has been in play since the start of the year. The longer the channel has been in play the more significant it is. As Peter Brandt noted price usually plays to the downside. Targets could be $28-32K. See here: zycrypto.com/veteran-analyst-peter-brandt-warns-of-bitcoin-plunging-to-28000-if-this-pattern-is-validated/
2) We are at / below the BMSB (Bull Market Support Band) - See green / red wave on chart which shows the 20W SMA and 21W EMA at ~£41.5 - 42.5K. Many crypto traders use this indicator to define where we are bullish or bearish. We would need to punch through this and hold above therefore to signal bull for many market participants. Note: we are punching into this indicator on the Daily chart currently but most people use it on the Weekly.
3) Not shown but onchain analysis is signalling that we are well into the bear cycle for BTC but it is probable that we have further pain, or at least consolidation before pushing back higher. See latest Glassnode video for a great up-to-date summary: youtube.com/watch?v=szhyWHDmuG4

IMHO now is a time for sitting on your hands and seeing how it plays out. Neither a good time to be selling or buying. It's a roll of the dice.

Not financial advice. Blah blah.