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Charts of the Week - Could Bitcoin recover from the yearly low?

Charts of the Week - Technical Analysis
• Could Bitcoin recover from the yearly low?
• Oil bounced back ahead of US CPI and China Economic Data.

Charts of the Week - Technical Analysis

  • Could Bitcoin recover from the yearly low?
  • Oil bounced back ahead of US CPI and China Economic Data.

XBT USD / Bitcoin – Bitcoin Recovery?

  • Resistance Zone: $44000 to $45000
  • Key Resistance: $40000
  • Major Pivot Point: $34300
  • Support Zone: $29000 to $28000
  • 200 Day SMA – Green Line
  • 50 Day SMA – Red Line
  • CBOE VIX – Volatility Index @ 32.99 - 1.76 (-5.06%)

Trade Insights

XBT/USD – Chart shows Viable long positions above the Support Zone at $29000 to $28000, with the first target of the Major Pivot Point at $34300 and after confirmation above the Pivot then further long positions towards the Key Resistance level at $40000 and then the test of Resistance Zone between $44000 to $45000.

Alternatively, Short positions below the Support Zone at $29000 to $28000 with the target to head towards the next support level at $25000.

XBT/USD Chart Analysis:  Directional bias - 2 Weeks 

Bitcoin dumping has continued so far since the digital asset started its descent from its $69000 all-time high. XBT/USD chart shows that Bitcoin has dropped to create a Trough at $29755 little below the long-term Support at $30000. Later, it quickly jumped back above the $31000 level.

As seen in our previous analysis on Bitcoin the prices were holding just above the support level of the ascending channel that started in January. And it was moving upwards with higher highs and higher lows. However, the pair just dropped sharply from the Key Resistance level at $40000 to touch the fresh low of the year at $29755. Bitcoin pushed for a short recovery after dropping below the $30000 Support Cluster.

The RSI Indicator has dropped below the 30 points over-sold mark and now recovering to move back above this crucial level.  The prices are trading well below the 50-day SMA red line and quite below the Green 200 Day SMA line indicating full bearish bias of the investor.

Fundamental Overview:  Are Whales Exiting Bitcoin? Bitcoin Whales are large stakeholders in the digital currency markets. They could be exiting the digital currency to avoid more losses in case it all turns out into a full-blown bear market and because of low sentiments that have plagued the markets for some time now. This could mean we may see more downside in the Bitcoin in coming months if not sooner.

USO/USD Crude Oil – Oil bounced back ahead of US CPI and China Economic Data.

Oil Technical analysis

Earlier this week and in the previous week oil prices declined to slip below $100 and now have recovered back up in the recent session above $101 at the time of analysis. The day before yesterday Oil touched the $98 mark to create a third higher high and an upward ascending channel where prices have jumped from the lower limit of the channel now heading towards the midline.   

USOIL/ WTI Crude Oil Chart
USOIL/ WTI Crude Oil Chart

Trade Insights

USO/USD –Viable Long positions above the Pivot point at $102. targeting the Key Resistance Level at $109, after this the pair could climb higher towards the Resistance Zone at $112 to $114.

Alternatively, Short positions below the Key Support Level at $98, heading downwards to test the Support zone at $95 to $93.

Click to see Market Insight: Market Insight – Is A Robust Relief Rally On The Cards For S&P 500?

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The information provided is of a general nature and is not intended to be personalised financial advice. The information provided is not intended to be a substitute for professional advice. You may seek appropriate personalised financial advice from a qualified professional to suit your individual circumstances.

Trading in Rockfort Markets derivative products may not be suitable for everyone as derivative products may be considered as high risk. Please ensure that you understand the risks involved. A Product Disclosure Statement can be obtained here and should be considered before trading with us.

Vishal, R.

May 11, 2022

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