The crypto market currently seems to be completely out of touch with risky assets on the stock market and it is difficult to say whether or not this will be profitable during bitcoin, which has been building a trading range for a month now under the extreme resistance of 31,000 and 32,000 dollars.
The US equity market and technology are in a situation of massive overbought
“Be careful bitcoin not to miss the boat, otherwise you will expose yourself to a powerful backlash! This is exactly the sentence I could say to BTC if the latter were a conscious person, I would give him this warning because he is currently taking a significant risk.
It has now been a month since the crypto market has been stable under major resistance, having benefited from the bullish impulse generated by the news around bitcoin ETFs seeking validation from the SEC, the American stock market regulator.
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During this past month, the other asset classes have developed very marked trends, here is a summary:
- The US equity market has approached its all-time highs, those set in December 2021, with the S&P500 index now in contact with major resistance at 46,300 points;
- The reservoir of retail buyers, according to AAII data, is now filled to the brim (see the lower left inset on the first chart below);
- The S&P 500 Technology sector index has even set new all-time highs, forcefully and crashing above the peaks of December 2021 (imagine in terms of equivalent, it’s a BTC at $70,000) and is massively overbought;
- The US Dollar hit a new yearly low against a basket of major currencies, including new highs in EUR/USD and GBP/USD;
- Interest rates failed to recover from levels that triggered the banking shock last March.
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All the trends that I have just described above should have allowed the crossing of the resistance on the price of bitcoin. It is now a matter of time for BTC and time is against it.
As next week sees another Fed fund interest rate hike and the publication of GAFAM quarterly results, bitcoin should be aware that it will no longer have the support of its usual correlations.
So if he continues to procrastinate, he will be subject to the risk of correction.
Chart produced with the TradingView site and which reveals the Japanese candles in daily data of the S&P500 stock market index, as well as the latest positioning of US retail traders according to data from the American Association of Retail Investors (AAII)
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Bitcoin price will make its technical decision imminently
Let’s now return to the analysis of the price of bitcoin and the main chartist thresholds to watch:
- The major resistance at $32,000 is known to all and remains the dominant chart factor;
- The short-term trend technical pivot stands at $29,500;
- If this support is broken, the market will correct towards $28,000;
- We would need to break above the intermediate resistance at $30,500 to restart the upside.
The technical choice of BTC will be made between this Thursday, July 20 and the FED’s decision on Wednesday, July 26.
Chart made with the TradingView site and which displays the Japanese intraday candles (H4) of the price of bitcoin (BTC / USD)
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Vincent Ganne is a market strategist, technical analyst, trainer on the stock market and speaker on BFM Business. With a long experience in the field of analysis, he offers a global approach to financial markets. Both from a macroeconomic point of view and from a microeconomic point of view. Vincent Ganne also uses many aspects of chart analysis with the aim of forecasting trends in financial assets over the medium and long term.
Vincent Gane
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