Despite last week’s dump and poor price TA, investor sentiment has not yet returned to extreme fear. This signals that there is more pain to be found before a bounce could occur. Typically we wait for sentiment to hit extremes before taking a contrarian position.
Glassnode reported last week that BTC broke below the realized price level of $21.7k last week, signaling that the market is in an aggregate loss. The $21.7k mark is a key level for BTC to reclaim.
Bitcoin’s total hash rate has stabilized above the 200 TH/s over recent weeks, showing that the network has recalibrated to the new price level. Typically large declines in hash rate correspond with large price corrections.
With bear flags forming on the 4H and weekly charts, a pending death cross, and the loss of key price levels, things are not looking good for BTC in the short/medium term. A retrace to the psychological $20k level looks likely in the coming days/weeks, as momentum indicators need to reset and consolidate before any bullish momentum can be regained. Fundamentals look shaky, and a global economy on the edge of recession spells future pain for BTC. Good times will come again, but there will be buying opportunities along the way.
* $20k (psychological)
* $17.6k (previous bottom)
* $21.7k (realized price)
* $23.1k (200w SMA)
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