This week we finally got the final announcement on the approval of spot bitcoin ETFs. We have thus concluded several months of media massage by financial giants, and it is time to look again at the bitcoin price course from the point of view of indicators and logic. The signals have been bearish for a long time. And the market will now be in the mood to listen to them.
Bitcoin price ranged between $41,500 and $49,050 this week. Quite a decent range. We started Monday bullish in anticipation of the approval of spot bitcoin ETFs . It arrived on Tuesday night, but it was quickly discovered that it wasn’t real. The exchange rate jumped up for a while, but even before the fake news was revealed, it started to fall quite decently. Wednesday’s right announcement has already shown no significant volatility.
On the other hand, Thursday’s inflation numbers from the United States got us moving. Inflation is higher than expected. First a jump up and then a quick rejection and decline down to the $46,000 mark. Friday’s announcement of producer price inflation was also not very positive for the price of Bitcoin. Further decline to $41,500. Here, the rate rebounded slightly and closed the working week at the level of $42,800. And here we are for the whole weekend.
Applying the Fibonacci retracement to the 4-hour chart, we see that we are currently around 38.20% of this range. The MACD indicates a possible trend change and the potential for a rebound. According to Dow theory, there could be a turnover of around $43,600 (50%). The gold level at $44,500 (61.8%) could possibly serve as resistance. Support can be found here at $41,800 and $40,200.
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Bitcoin Daily Chart Shows Bearish Divergence
Of course, a longer period of time will give us a better context for the analysis. On the daily chart, a significant bearish divergence with the Relative Strength Index ( RSI ) can be noticed over the last period . This is not a good sign and I would personally expect the price of Bitcoin to fall further. I see stronger support around $40,000 or just below.
I have marked historically important resistance and support levels on the weekly chart . We have had many weeks of growth, so a correction can logically be expected. From a longer-term perspective, at least a return to the middle of the Bollinger band (around $36,200) would make sense. The MACD has been indicating an expected reversal here for several weeks now, and it looks like there could be a bearish crossover on it in a few weeks.
What do the analysts think?
My point of view is definitely not the only one, and you can find a lot of popular analysts and their opinions on the Internet. Following the approval of the ETF, of course, much of the talk revolves around the upcoming Bitcoin halving , which is expected around April 18th. This has historically always been a bullish event on the price. So they assume that a new bull trend has already started and last year’s 156% increase in the price of Bitcoin was just the beginning.
On the other hand, popular analyst TraderSZ relatively shares my bearish estimate. According to his chart, a further decline would test $41,200 and $40,000.
But we must not forget about the Fear & Greed Index, which this week reached a state of extreme greed and then fell. It currently shows a value of 60, so still greedy. But neutral values are not far away. FOMO is starting to subside.
Conclusion
I’m glad the announcement is finally over. There was a lot of confusion about it, but in the end it was possible to issue and even confirm the announcement. After the announcement, the price began to behave according to the scenario that was relatively expected. Although we were expected to test at least $52,000. The thesis was probably confirmed that everyone who wanted to buy had already bought, so there was no great pressure. While almost $4.5 billion flowed into spot bitcoin ETFs on Thursday, interest was already down 82% on Friday.
Personally, I expect a decline next week. And maybe not only in the next one. The party is over and now it’s time to sober up. I think we will still test at least the price levels around $36,000 in the long term. I have currently moved orders to my spot buys there. In addition, we have the end of the Fed’s bank rescue package in March, and I agree with Arthur Hayes that it could be a decent blow to the entire financial market .
Looking at the weekly liquidity chart, it can be seen that even professional traders are now waiting and watching for market developments . Liquidity around USD 42,250 is formed in the better time periods. It is quite possible that we will still be able to get her today.
I will personally wait until Monday to open positions on derivatives . I am interested in how the Asian markets will evaluate the current situation. Meanwhile, wonderful performances can be seen on ethereum, for example . It is speculated to be the next token in the sights of the financial giants for the next possible spot ETF in the United States.
However, this entire article is of course only my personal opinion and is neither investment advice nor any form of recommendation for you. DYOR.
