Oil and indices are down but crypto hasn’t dipped (yet).
Crypto, particularly Bitcoin, usually follows the S&P 500 and futures in the first few hours every Monday morning, but not this Monday.
The dip follows news of the Russia-Ukraine war dragging on longer and creating uncertainty around energy prices and inflation.
Strong red candles on the S&P are usually mirrored on Bitcoin’s price action, but not in this case. Bitcoin’s daily candle is staying up; however the dip may have been priced in already Sunday night.
Despite the volatile and erratic price action over the last three weeks, Bitcoin continues to make higher-lows.
Regression lines on Bitcoin after it’s local low at $33k are still showing an overall upward trend despite the volatility. However, if Bitcoin price action dips below the $34k range, it’s possible that investors will lose confidence and we retest lows again, dragging the regression slope downward. The more Bitcoin’s price action can stay in the mid-to-upper band of the regression, the more likely we’ll see a true rally and reversal of the nearly 5 month long bear market since crypto prices (and arguably stock market prices as well) are largely driven by general market sentiment over a crypto project’s fundamentals.
No amount of technical analysis can predict how world events can influence price action. If markets are truly a game of psychology, then the only way we can project prices is if we assume that the current (or most recent) market sentiment will continue into the foreseeable future – and that’s subject to change on a daily basis.
Weak men create hard times. It’s going to be a rollercoaster ride getting out of the slump in fiat and crypto markets.