After a few weeks of side trading, BTC and the crypto market finally made a breakthrough. Unfortunately, this was to the downside. Namely, extreme market optimism from the beginning of this year came to the reality check. July`s FOMC meeting minutes were revealed during the previous week, where it was clearly noted concerns of several FOMC members on the possibility that strong job market might push inflation to the higher grounds, and more rate hikes will be necessary in the coming period. Also, commercial real estate is going through some difficulties, which might affect some banks and financial institutions. Powell`s “soft-landing'' is still holding, but becomes questionable. However, a major push of the crypto market occurred after news that the largest Chinese real estate company, Evergrande, filed for protection under the bankruptcy law in the US. At the same time China's real estate market is passing through difficult times, which additionally supported the “perfect storm” on financial markets, as some economists are commenting on recent market developments.
BTC`s price decrease during the previous week, activated some $1B in liquidations on futures market, where positions of investors betting for BTC`s increase in price were liquidated. These liquidations additionally affected BTC, which tested
25K
support as of the end of the week. RSI reached level of 17 which can be treated as a highly oversold market side. At the same time, the moving average of 50 days started its modest convergence toward the MA200 counterpart. There is still a difference between two lines, so potential cross might occur in the next several weeks, if the negative trend continues.
The week ahead will be a week when the markets should calm down after a huge drop in price and when BTC`s price will find a new balancing level. Support line at
25K
had been tested on a short occasion during the week, and there is still a risk that the price might revert to this level for one more time. At this moment there is no indication that the price might go lower from this level. RSI is pointing to a short term reversal. In this sense, the price of BTC might revert toward the short-term stop at $28K, however a move toward the $30K resistance is highly unlikely at this moment.
BTC`s price decrease during the previous week, activated some $1B in liquidations on futures market, where positions of investors betting for BTC`s increase in price were liquidated. These liquidations additionally affected BTC, which tested
25K
support as of the end of the week. RSI reached level of 17 which can be treated as a highly oversold market side. At the same time, the moving average of 50 days started its modest convergence toward the MA200 counterpart. There is still a difference between two lines, so potential cross might occur in the next several weeks, if the negative trend continues. The week ahead will be a week when the markets should calm down after a huge drop in price and when BTC`s price will find a new balancing level. Support line at
25K
had been tested on a short occasion during the week, and there is still a risk that the price might revert to this level for one more time. At this moment there is no indication that the price might go lower from this level. RSI is pointing to a short term reversal. In this sense, the price of BTC might revert toward the short-term stop at $28K, however a move toward the $30K resistance is highly unlikely at this moment.