3 weeks ago
This is an investigation station by CoinDesk expert and Chartered Market Technician Omkar Godbole.
Bitcoin (BTC) bounced backmost to astir $121,500 aft dipping beneath $120,000 precocious Thursday. Further gains whitethorn beryllium hard to execute oregon could beryllium short-lived for 2 reasons.
First, momentum indicators connected short-term charts person turned bearish. On the hourly chart, the 50-, 100-, and 200-candle elemental moving averages (SMAs) person aligned bearishly, present stacked 1 beneath the different – a classical bearish configuration. Additionally, the signifier of consecutive little highs points to weakening buying pressure.
Second, cardinal ETFs are signaling a risk-off sentiment.
The iShares iBoxx High Yield Corporate Bond ETF (HYG) has breached beneath its bullish trendline from May lows and slipped beneath its 50-day SMA for the archetypal clip successful six months.
As HYG holds high-yield ("junk") firm bonds, a downtrend present typically reflects rising capitalist aversion to risk, with investors moving distant from riskier, lower-rated bonds.
While BTC is often called integer gold, it has historically correlated with stocks, reflecting broader marketplace hazard sentiment.
Meanwhile, successful the fiscal sector, the Financial Select Sector SPDR Fund (XLF), which tracks large banking stocks, has mislaid momentum since precocious August and appears to beryllium forming a rounding-top signifier suggestive of a carnivore market. Similarly, the determination banking ETF (KRE) has besides breached beneath its bullish trendline established since April.
Key levels
BTC's bearish method setup connected abbreviated duration charts, coupled with caution successful cardinal enslaved and banking ETFs, bespeak a marketplace situation leaning towards hazard aversion.
The contiguous enactment for BTC is seen astatine $120,000 followed by $118,000. A determination supra $124,000 would weaken the lawsuit for a deeper pullback.
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