Daily Report – Bitcoin and Market Update (November 28 2022)
The weekly chart displays another instance of a sideways week under the critical 17500 USD support level.
By remaining below the support, Bitcoin proves technical weakness as there are not enough buyers or interest to drive the prices higher.
Technically, BTC shows a substantial deviation to the downside against the long-term 200-week support line around the $24000 area.
Interestingly, for the first time since Q2 2019, in over three years, BTC has displayed such a strong negative correlation vs. S&P 500 index. At the -0.85 correlation coefficient value, BTC trades aggressively in the opposite direction than the large-cap stocks.
With hints that the miners are hanging off the cliff, risking capitulation cascades. Such an event could trigger a chain reaction selloff in the market.
The daily chart reveals that BTC would need an almost 35% rally to catch up with its long-term fair price at $21700.
The price is considered a fair value for money by the average mining costs. This is substantial resistance and a critical technical level, above which the bulls put the bear market at risk of cancelation.
As long as BTC stays below the $17500 support, the miners are at risk of capitulation, which could put more supply pressure on Bitcoin prices.
Such a black swan event could potentially result in the BTC slide to the technical breakout objective at 10-12k USD.
The medium-term outlook unveils a local weakness for the Bitcoin technicals after losing the $16500 support.
Until an upside break outside the 15500-17000 USD cluster comes up, BTC is more likely to continue to follow the dominant trend of 2022 – downwards.
Typically, a sideways pattern following a sell-off works like a redistribution move, followed by a further decline.
The bottom overthrow at 15500 USD, however, still has chances to lift the prices up, as failed pattern performs better in the opposite direction than initially anticipated. Until it’s invalidated, the short-term bulls still have (a slight) chance.
FEAR & GREED INDEX
The sentiment barometers prove the market has improved slightly regarding expectations and attitudes toward what’s ahead.
Investors are pricing in bearish continuation, as the index hand points at 28 points on the scale out of 100.
In such cases, quite often, it hints, in fact, a bearish continuation.
In the extremes, traders decide to make the most irrational decisions.
The vast majority of cyclical reversals occur when there’s a highly desperate and depressed attitude from most of the market participants.
It’s not in the extreme currently, as per the index.
It may suggest that it’s not necessarily a good move to bet against the current market trends.
“Don’t fight the trend” – it’s more likely to experience a trend continuation than a reversal.
I hope it helps.
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