What risk on assets Bitcoin should expect before smart money arrives?

Disclaimer: The findings of the following analysis are the only opinions of the writer and should not be considered investment advice

In November 2021, the news came out that the US consumer price index (CPI) rose by 6.8% compared to the previous year. This indicated that inflation was higher than expected. Smart market participants asked a relevant question – Could this inflation cause investors to flee cryptocurrencies, which are inherently risky positions?

Well, a look at Tether Dominance in the market showed that it was standing at 4.7% at the time of writing. This means money is sitting on the sidelines waiting to be wagered or waiting to wipe out these stormy conditions.

Could Bitcoin’s $34k Prices Cause This Implementation, Or Will We Get More Pain?

BTC-1 daily chart

Source: BTC/USDT on TradingView

Invasion by Russia, inflation, energy shortage, possible decline in wheat exports and more factors are plaguing the long-term investor. Especially those who believe that Bitcoin is digital gold. For these investors, buying Bitcoin in times of crisis seems obvious, but what does the rest of the market think?

Based on technical analysis alone, the price has traded in the $29.4k to $65.1k range since early 2021. area where BTC will find demand in the coming weeks.

However, the trend has been bearish for the past four months. A move to $30k cannot be ruled out. In the north, resistance was stiff at $44.5k and $52-$53k. In the south, the checkpoint was $36.8k.

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Source: BTC/USDT on TradingView

The RSI has not fallen below 35.9 and a sharp dip below this level on the daily chart could lead to losses for BTC. However, in the long run, such a drop would bring bargains.

The OBV has been moving sideways since June and found a local high in early November when BTC hit $68k. At the time of writing, the CVD was in bear territory.

Conclusion

There were not many signs of a shift in the trend towards bullish. The market structure has been bearish for the past few months, although a range between $36.8 and $44.5k could have been reached in shorter timeframes.

The USD 36k area provided good support while USD 44.5k and USD 47.1k levels continue to beat to initiate a bullish trend for Bitcoin. However, Bitcoin exiting exchanges is not as great as it was at the start of the previous bull run. This could spell even more downside for BTC before the smart money demand arrives.

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