On this Wednesday, August 3, 2022, bitcoin seems to be both bullish and bearish and divides a good number of investors. While some analysts were considering a bullish recovery from the range break, views are more mixed at the start of August. And bulltrap returns to the front of the stage as a privileged situation. I detailed this situation in the article written last week. The macro economy leaves a lot of room for volatility, and makes for stressful ups and downs without real conviction in the long term. Let’s start right away with this week’s 360 bitcoin tip. I will try to be as complete as possible when sharing my feelings about the deal. Good read!
Bitcoin is still obsolete
The crypto market leader is still struggling to regain strength. The trend is clearly bearish, just go in the daily or monthly time unit to realize it.
There are 2 interesting levels to be able to reset down (in short), or at least take profits. The area between $25,400 and $30,000 (in pink on the chart) is very important. It highlights entry points for sellers that are likely to reposition themselves on the long-term trend. The $30,000, beyond the psychological threshold, represents strong resistance from a technical analysis point of view.
Profit taking was already observed at the beginning of the week, marking a bull trap. Because of this event I believe that the $22,000 support is likely to be revisited in the coming days.
As long as the support is there and the S&P 500 is also supported, a bullish story could be put in to achieve the objectives described above.
The S&P500 at resistance
You know me, I always look at the US index. We find it this week on resistance. The objective that has been stated for weeks has been achieved.
This area is likely to bring in the majority of sellers and allow buyers to take profit. If we look at this reaction then, I will have a pessimistic and bearish bias on all markets, including crypto market. Look at this level we may be looking at lows in the US market.
ETH 2.0 on everyone’s lips
The event “The Merge” is one of the most important meetings of the year. More than 6 years of work to allow Ethereum to go from Proof of Work (PoW) at Proof of Stake (PoS). It should greatly improve its scalability and allow the development of more complex applications. Despite the various postponements, the official launch seems imminent.
This story could be a catalyst for the entire crypto market, creating strong bullish momentum in the medium term. On the other hand, in case of disappointment or failure, expectations as well as prices can be reduced very quickly. We must therefore be vigilant.
PELOSI and Taiwan: a source of volatility for the markets
Speaker of the United States House of Representatives Nancy Pelosi landed late Tuesday afternoon. However, the Chinese authorities are at risk of retaliation if the trip takes place. The White House has tried to distance itself from this visit. While the United States stressed that the trip was not a sign of a change in its one-China policy, Beijing warned that its military forces would never stand idly by and that “anyone who plays with fire will burn”.
The last senior US official to visit Taiwan was President Newt Gingrich in 1997, which followed the Third Taiwan Strait Crisis and Taiwan’s first democratic presidential election on the island in 1996. At the time, the Clinton administration responded to the Chinese. a military build-up in Fujian province by deploying the most powerful weapons ever found across the Taiwan Strait and staging the largest show of American military prowess in Asia since the Vietnam War. China backtracked in response, but much has changed in recent years with a more powerful Chinese military and a new zeal to “reunify” Taiwan with the mainland under President Xi Jinping.
Markets in the Asian region fell by an average of -2% due to the increase in risk aversion.
The best possible scenario : Continuous saber sound and weapon reactions are limited to military maneuvers. Chinese warplanes could fly close to Taiwan’s air defense identification zone, or naval activity could take place near the center line dividing the strait. Retaliatory measures could also be limited to launching test missiles into the sea, considering economic retaliation.
The Worst Case : President Xi cannot afford to look weak amid the slowing and deflating housing bubble. And it is indeed dangerous for autocrats to feel that they are beginning to lose power. The People’s Liberation Army could send warplanes over Taiwan, prompting the island to decide whether or not to shoot them down. America and its allies in the region would likely be drawn militarily into the conflict, creating further global turmoil following the US withdrawal from Afghanistan and Russia’s invasion of Ukraine.
A case to follow that was, in part, at the root of this Tuesday’s volatility on the markets.
Finally, I get numerous questions asked on the site where I analyze my values. Personally, and for many years, I am using TradingView, an intuitive interface with many tools and a wide selection of assets. It is clearly the most advanced and widely used interface on the market.
This is the end of this analysis, feel free to give me feedback on my Twitter account @0xakin. Don’t be too fat, take profits regularly, be successful money management for your trades and depending on your initial plan. Only invest what you can afford to lose as long as it doesn’t affect your morale too much. Have a great week everyone, and I’ll see you next week for a new analysis!
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I am passionate about technical and technological analysis, I have been enthusiastically following cryptocurrencies since 2017. Besides trading and investing, I try, in my own way, to democratize the ecosystem that will change our habits of tomorrow!