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Analysis: This Indicator Rejects Bitcoin At $40,000

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Sometimes the bright rays of the sun give you a warm spring feeling and suddenly you find yourself in the pouring rain wondering if summer will ever come again. Is this the daily weather talk or is it about cryptocurrencies?

Well, sometimes it’s not much different. In recent days, bitcoin made a valiant attempt towards 40,000 dollars (35,500 euros), but it was punished with a hefty red candle. Have the dark clouds disappeared? Let’s look at the charts with the bitcoin exchange rate in dollars.

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The bears push back
On the chart in which each candle represents one day, we see EMA-20 as a suffocating blanket over the candles. It is a line that calculates the past 20 candles, with the last candles counting more heavily. The line is marked in red here. Since the end of November (see top left of the chart), the price has no longer been structurally above it.

Yesterday and the day before yesterday this line coincided with the trend line, here black, and just above it was resistance from the fibonacci retracement tool . They are lines that have all been in the charts for quite some time and apparently the price of bitcoin was no match for it. The bears had had enough and pushed the bulls back south.

The relatively short uptrend (purple here) has been broken; a minus, but the downward trendline indicated in gray has not been broken; an advantage.

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Take care
If we look at the chart where each candle stands for one hour, you can see that the price is now just above the gray downward trendline. That line again coincides with the 0.236 fibonacci line. So some support can be expected here. Should the price fall through, there is still support between 35,500 and 35,600 dollars (about 31,500 euros). If you look at it positively, that would be a great level to make a big jump up. The blue circles indicate the levels that can be monitored in the short term.

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Tech companies results
I have already discussed the connection between the price of bitcoin and the (tech) stocks. The US stock markets were mainly supported on Wednesday by the strong results of Alphabet, the parent company of Google. Rather than follow the stock, bitcoin appeared to lead, in a negative way. Because although the shares showed a mixed picture (with Alphabet’s results giving cause for optimism), the share of Facebook parent company Meta collapsed after market hours by 23 percent. Earnings in the fourth quarter were lower than expected. Wall Street will open in the red this Thursday, according to US futures.

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The days are getting longer, but February is on average the coldest month of the year. We will soon know whether that also applies to the crypto weather, spring is coming anyway.

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