It’s not too late for Bitcoin to rally higher as it draws an indecisive half “doji” candle on the weekly chart.
Notably, Bitcoin’s price correction below $33,000 this week has created a lower wick, showing the bulls are buying the dip.
A strong trend reversal followed, bringing BTC price to $38,960 on Jan. 27. However, the bulls failed to hold this level for too long, creating another wick but also indicating bullish momentum.
Weekly BTC/USD price chart and Doji Candle | Source: TradingView
Since then, the price has corrected lower near the weekly open of $36,200. In doing so, it formed a transitional candlestick known as a “doji,” which reflects the indecisiveness between the bears and the bulls. If found at the bottom of the trend, the doji candlesticks could signal a directional reversal.
Support candle on level $30,000 CZK
Bitcoin price has been going down since hitting a record high of $69 in November 2021. Accordingly, the leading cryptocurrency has shed more than 50% of its gains, even falling below its 50-week exponential moving average (50-day EMA, red wave), a key support level.
But Bitcoin’s strongest preliminary support is at $30,000. This level has prevented many bearish attempts since January 2021. Specifically, from May to July 2021, $30,000 was the attraction for accumulators, which helped push BTC price to ATH.
“If support holds around $30,000, we could see strong uptrend yield,” noted market analyst Crypto Batman.
Weekly BTC/USD Price Chart | Source: TradingView
Moreover, the doji that formed before BTC price touched the $30,000 support level suggests weaker bearish sentiment near that level.
Perspectives Discount
On the other hand, Bitcoin’s bullish outlook could become invalid if it breaks below $30,000.
Bitcoin’s weekly Relative Strength Index (RSI) is currently close to 38 and is still floating in the oversold territory below 30. It shows that the BTC price still has room to fall further in the coming sessions, at least until the test of $30,000.
Weekly BTC/USD Price Chart | Source: TradingView
Meanwhile, a close below $30,000 increases the risk of bitcoin falling to the 200-week EMA (blue wave in the chart above) near $25,000. This is mainly because this wave ended historical bearish cycles in 2018 and 2019, leading to sharp reversals that sent prices to new record highs.
The element basic inclined the script Discount
This week, bitcoin price has been bouncing between highs and lows on uncertainty as the Federal Reserve (Fed) mentioned plans to raise interest rates in 2022 to fight inflation. The upside eased on Wednesday after the US confirmed it would hike interest rates in mid-March.
Jerome Powell’s post-announcement press conference was reveal more the possibility of the Fed raising interest rates after each monetary policy meeting for the rest of the year. The Fed Chair acknowledged that the inflation outlook has deteriorated since their December monetary policy meeting and stressed that current supply chain issues may not be resolved before the end of 2022.
Joe Wiseenthal tweets:
“I think this is a good question from Colby Smith and a helpful answer from Powell in understanding the mindset of the FOMC.”
Bitcoin hesitantly moved up and down in the hours leading up to the Fed’s statement and during Powell’s Wednesday afternoon conference. It briefly jumped to nearly $39,000 after the central bank made its policy decision, but began to decline after Powell began to speaking to journalists late in the afternoon (local time).
Independent market analyst CryotoBirb dismissed concerns about the Fed’s tightening policy, saying the central bank “will not take a destructive approach to financial markets”.
The Chartist notes that the Fed-caused stock market crash looks bad for politicians. This could leave the central bank with the choice of delivering only “short-term downside” in risk markets, followed by strong medium-term rallies.
“It’s also important to keep the broader context in mind that Bitcoin has taken advantage of stock markets and Bitcoin rallied while stocks plummeted.”
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