Bitcoin Analysis – Will the $30,000 Support Hold?

After sneaking through the lows of the year last week, Bitcoin is struggling to maintain its critical support at $30,000. At the same time, leading indicators are treading water despite significant implied volatility. Therefore, a lull in the financial markets does not seem to be ruled out. Because at the same time the signs of peak inflation are beginning to appear.

This analysis is offered to you in collaboration with Le Trading du Coin and its algorithmic trading solution.

The poor results of the first quarter of 2022 of American companies in the retail such as Wal-Mart, Home Depot, Lowe’s Companies, Target or Ross Stores, indicate that US consumption is losing momentum faster than expected. But, by causal relationship, this bad news could well represent good news about a possible downward revision of the Fed’s monetary tightening.

Curiously, Bitcoin could take advantage of this situation. This even if the latest technical analyzes are currently leaning towards a new and sad historical record. Because the possibility of seeing it hold the $30,000 support could portend a technical rebound. And at the same time stop its bad momentum started since the beginning of April.

Bitcoin – A bear market set to last?

Except in the case of a close above $31,295 (to be more precise) at the end of the weekend, Bitcoin has a good chance of having an eighth consecutive week of decline. This further reinforces the psychological weight of the shoulder-head-shoulder (ETE) and the downline. Especially since the 30-week moving average (weekly 30MM) tends to slip below the resistance of $46,000. In the form of a confirmation of a phase 4 of Weinstein which would only just begin.

The exit of Bitcoin from its range or horizontal channel (orange rectangle) from below has definitely confirmed the bearish reversal of its technical indicators in weekly unitss. On the one hand, the MACD which sees its gap widening dangerously compared to the signal. And on the other, the RSI is gradually moving towards the oversold zone.

As a result, a bear market triggered since the last Bitcoin ATH in November 2021 is gradually setting in. With a main condition already validated, since it records lower and lower high and low points. This even if for the moment, the second low point is not yet definitive. Hence the hypothesis of seeing BTC prices are pushing deep into the $30,000 support.

Bitcoin – A Technical Rebound to Ease Tensions

If the weekly Bitcoin price chart does not offer a cheering prospect, a few favorable technical signals in daily units could nevertheless trigger a possible technical rebound. This is to temporarily calm the ardor of the sellers. But without the latter having to face too much pressure in view of the crisis of confidence that is hitting the cryptocurrency market. Largely following the collapse of the UST stablecoin.

Daily Bitcoin Price Analysis - May 20, 2022

The slight recovery of technical indicators seems to be on track to plead in favor of this calming scenario. As long as the $30,000 support does not give way. Which seems rather complicated at the time of writing this analysis. Because BTC prices have been hovering around a critical level for a few sessions, with an improbable stability triggered by an easing of downside pressure.

In this context, the union low of this potential technical rebound on $30,000 could lead to the bottom of the tidylocated at $35,000. A level that has just changed polarity from support to major resistance. And, in the case of an extension of this trend, a possible reintegration of its tidy which is still not to be excluded. With the prospect of BTC getting closer to the $38,000 targetnear its descending line.

Bitcoin – High volatility, but calming down

In all honesty and until proven otherwise, Bitcoin is comfortably settled in a bear market that has started since its last ATH in November 2021. And this even if many investors in the cryptocurrency sector still refuse to accept it. With a trend about to materialize with the definitive release of its tidy during this week. Unless a miracle happened in the meantime out of nowhere.

Daily VIX price analysis - May 20, 2022

On the other hand, other unfavorable technical signals such as Weinstein’s phase 4, prices well below the weekly 30-MA and the daily 200-MA and the descending line, maintain strong selling pressure. And even a resolution of the current uncertainties in the financial markets could not trigger a favorable trend reversal in BTC prices overnight.. Much more will be needed. As for example, a possible decorrelation vis-à-vis equity indices.

Despite new tensions on the financial markets, a certain easing of volatility remains remarkable. A fact that may seem surprising. But between the lines this seems to indicate that investors believe that most of the bad news has finally been digested. And in this context, a few reassuring catalysts could be enough to trigger a large-scale technical rebound in risky asset classes. And therefore favor that of Bitcoin on the targets mentioned above.


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