The technical picture for Bitcoin is getting more and more complicated, but this does not necessarily provide any signs of a changing trend. A huge downside wedge with the upper margin drawn from $69,000 (all-time high of 2021), $48,000 and $19,000 suggest that Bitcoin prices may go down to $4,000 per coin. Prices spiked last week towards the upper margin and this could mean that bears could begin to collect stop-losses and leave bulls without any steam before storming the support level at $18,000-19,000.
The narrow price channel has been formed with the support at $18,250 and the resistance at $20,450. A breakthrough of the resistance occurred amid the weak upside wedge formation. This could be a temporary growth but a false bounce from the global downside wedge has been confirmed. The nearest downside target is at $18,000 per coin, down to $13,000.
Digital asset prices have a strong correlation with risky stocks that are currently rallying in the U.S. amid hopes for a lower trajectory of the Federal Reserve (Fed) interest rates hike. It is worth remembering that investors were regularly let down after feeling exaggerated enthusiasm. So, the feeling of discouragement may surface again.
Any justified reasons for the optimistic environment to switch to one of where risks can be seen to be taken are simply not present amid high inflation in the U.S. and stagflation in the Eurozone. The Fed could score some extra points for Democrats before the elections on November 8 by slowing down interest rate hikes. But U.S. President Joe Biden has continuously shared the point that he will not interfere with the Fed’s decisions.
It is worth noting weak Q3 2022 financial results of U.S. listed companies. Only Apple and Microsoft delivered relatively strong results, while most of the other tech giants suffered from a strong U.S. Dollar and the slowing down of economic activity. It is very hard to remain optimistic now and believe in the swift economic recovery, and a rebound in the stock and crypto market. So, the time to remain bullish within the crypto market has not come.