Market Analysis: Bitcoin Fades from $42K as macro fears rise

Bitcoin reached a high of $42.196 early in the New York trading session. Locally Bitcoin has been fairly volatile, but when zooming out it appears to remain flat. This indicated some uncertainty among market participants. Therefore, let’s use the time wisely and take a hard look at how price has behaved, and what this means in the larger time frame.

Let’s start with the lower time frame, which typically is more of interest for a day trader or swing trader. The way I am looking at Bitcoin currently is framing the core of the price action in the blue box to be seen from below in fig 1. We have spent the majority of last week within this box. With that as a starting point, we can now build ideas on top of this. Moving onto fig 2, the blue box helps to identify the chart as a sideways range, with deviations to the upside and to the downside. This allowed me to make an informed decision and trade the price action as such deviations. The problem with ranges however is, at some point they break as price reaches a decision making point and searches for the next area of value. This is something we have done ever since the second deviation to the downside. After an attempt to deviate once again on the upper side of the blue box we have traversed further up, creating the necessity to zoom out and take a look at the larger picture.

In fig. 3 below you see a chart dating back to early Januari this year. If you look closely, then you see that the market has not only flatlined over the past week, but rather over the past few months. Adding a volume profile over that range, we can see that the place of its most accumulated volume is roughly around the $42K mark. This is a major keylevel, and has proven itself many times over as we have seen strong reactions from the levels in the past (see fig. 3)  If one has studied the market in depth then it would become clear that price tends to calm down around its epicentre of the range before making its next decisive move, providing us with the next piece of the puzzle and a technical reason why price is stalling around this level.

Now with the context around us clear, it is a matter of time before we will travel further and move on to the next section of the macro perspective. If the bulls manage to reclaim $42k as support, one can look again for new levels higher up, as to be seen in the red box of fig. 4. Should we lose the level definitively, then the green box is likely to be tested.

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The information provided above is not financial advice but for educational and entertainment purposes. Please do your own due diligence or consult a financial advisor before investing in any digital assets.

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