In the pictures you can see heat maps of the US stock market and the cryptocurrency market. As can be seen in the screenshots, the weekly closure of markets occurred without the repurchase of assets, which indicates a continuation of the downward trend.
Bitcoin$BTC closed the weekly candle under the long-term moving averages, and the closure of the weekly candle occurred almost at the very bottom of this candle. Also, the price has just left the bearish Wedge down pattern and has just started working out the pattern.
These are also negative factors indicating a continued decline in the crypto market.
👀 A more interesting fact is that Bitcoin on all timeframes below the daily is in the severely oversold zone according to the indicator. Despite the fact that the US stock market indices did not even reach the average neutral value of the indicator. And on the weekly timeframe, Bitcoin is still far from unloading the bearish divergence.
With such input data, going into purchases now would be a hasty decision, because the breakdown of the long-term moving average and closing under it is a very strong negative signal, which indicates a full transition of the market to the bearish stage. And if you think about it, now there are no drivers for growth, but we have a huge number of purchases at a price of $30,000.
🔼 Of course, periodic upward shots in order to knock out short positions will be normal and that is why we do not trade shorts on margin. There has been a hunt for liquidity on this instrument for many years, and the mathematical expectation from playing short is not in our favor.
Overall, we do not expect the price to return above $28,700 in the next 1-2 months. And to be honest, we think that we will now continue to fall without strong pullbacks to the top, since there is a mood in the market to buy out this drawdown, which means there is no short sentiment in the market.
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