BTC/USD Market Position Amidst Geopolitical Tensions and ETF Hype
Key Takeaways:
- Geopolitical tensions impact crypto markets.
- BTC/USD experienced a significant correction with potential for recovery.
- Mixed market indicators suggest a cautious trading approach.
Crypto Industry News:
Geopolitical tensions, particularly between Israel and Hamas, are influencing crypto markets. The conflict's escalation is driving risk sentiment down, impacting risk assets like cryptocurrencies. Conversely, the SEC's approval of Bitcoin spot ETFs initially boosted crypto prices but the hype is subsiding, leading to market deflation.
Technical Market Outlook:
The BTC/USD made a new yearly high at $49,126 but faced a sharp reversal, marking a -20% correction. Bulls found support in the $38,198 - $38,700 zone, hinting at potential recovery. The pair is oscillating around the $40,000 level, showing market indecision. Resistance is noted in the $39,822 - $40,568 zone.
The momentum on the H4 time frame chart is weak and negative, however, the extremely oversold market conditions had been hit already and now the market is trying to increase the momentum force. The local pull-back is now on the table, but the upside is limited towards the level of $39,822 - $40,568 zone.
The price of Bitcoin is currently between the 100 EMA and 50 DEMA, showing some indecision in the market. We can observe both bearish engulfing patterns (indicating potential reversals to the downside) and bullish engulfing patterns (suggesting reversals to the upside). The 100 EMA (purple line) may act as dynamic resistance.
Market Technical Indicators:
- Momentum: Weak and negative on H4 chart.
- Price Position: Between the 100 EMA and 50 DEMA.
- Candlestick Patterns: Mix of bearish and bullish engulfing patterns.
- Indicator Signals (1H): 13 Buy, 3 Sell, 6 Neutral.
- Moving Averages (1H): 12 Buy, 6 Sell.
Sentiment Scoreboard:
General sentiment remains bullish 69% vs.31% bears), but shows a decrease in bullishness among Bitcoin traders. Last week sentiment remains bullish as well (55% bulls vs.45% bears) together with the last three days sentiment (55% bulls vs. 45% bears).
Weekly Pivot Points:
- WR3 - $42,940,
- WR2 - $41,993,
- WR1 - $41,450,
- Weekly Pivot - $41,046,
- WS1 - $40,503,
- WS2 - $40,100,
- WS3 - $39,153.
Trading Scenarios:
Bullish Scenario: Bulls aim to consolidate above the DEMA 50 and breach the 100 EMA, targeting upper resistance levels. The bullish engulfing pattern near the DEMA 50 supports this optimism. However, failure to surpass the 100 EMA could dampen bullish prospects.
Bearish Scenario: Bears may capitalize on bearish engulfing patterns, aiming to drive the price below the DEMA 50 towards lower support levels. Bearish dominance is perceived if the price remains below the 100 EMA. However, a strong break above this level could challenge the bearish outlook.
Technical Insights:
Traders might consider short positions during pullbacks to resistance levels. Investors should seek more substantial reversal signs before long positions. Market context, including news and fundamental factors, is crucial for informed trading.
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Important Notice
The begginers in forex trading need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp market fluctuations due to increased volatility. If you decide to trade during the news release, then always place stop orders to minimize losses.
Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. For successful trading, you need to have a clear trading plan and stay focues and disciplined. Spontaneous trading decision based on the current market situation is an inherently losing strategy for a scalper or daytrader.
