Will Bitcoin be the loser of the year?

Will Bitcoin be the loser of the year?

20 September 2022 from Carlsquare

The Fed has for some time been controlling the market. Fear of increasing rates causing a recession has set a risk-off sentiment. The S&P 500 index is down near 19 per cent year to date. Nasdaq is down somewhat more than 28 per cent. But it gets worse. The risk-off sentiment has sent Bitcoin down more than 60 per cent year to date.

Development (in %) for Bitcoin’s current rolling future and S&P 500, YTD in USD

Source: Infront. Note: Past performance is not a reliable indicator of future results.

As shown in the chart below, Bitcoin is currently trading at support. Interestingly, a positive divergence can be spotted between MACD and Bitcoin. That increases the probability for the support to hold. A bounce followed by a break above falling MA100, and the sight is clear for further upside towards the 30 000 USD level.

Bitcoin current rolling future, one-year daily chart in USD

Source: Infront and Carlsquare. Note: Past performance is not a reliable indicator of future results.

As Bitcoin is far out on the risk scale, it is expected to be among the losers as long as the negative sentiment on the stock exchanges remains. Below is the weekly five-year chart. As can be seen, the next level of support is found around the 13 000 USD level.

Bitcoin current rolling future, five-year weekly chart in USD

Source: Infront and Carlsquare. Note: Past performance is not a reliable indicator of future results.

The full name for abbreviations used in the previous text:
EMA 9: 9-day exponential moving average
Fibonacci: There are several Fibonacci lines used in technical analysis. Fibonacci numbers are a sequence of numbers in which each successive number is the sum of the two previous numbers.
MA20: 20-day moving average
MA50: 50-day moving average
MA100: 100-day moving average
MA200: 200-day moving average
MACD: Moving average convergence divergence

Important notice
This information is neither an investment advice nor an investment or investment strategy recommendation, but advertisement. The complete information on the trading products (securities) mentioned herein, in particular the structure and risks associated with an investment, are described in the base prospectus, together with any supplements, as well as the final terms. The base prospectus and final terms constitute the solely binding sales documents for the securities and are available under the product links. It is recommended that potential investors read these documents before making any investment decision. The documents and the key information document are published on the website of the issuer, Vontobel Financial Products GmbH, Bockenheimer Landstrasse 24, 60323 Frankfurt am Main, Germany, on prospectus.vontobel.com and are available from the issuer free of charge. The approval of the prospectus should not be understood as an endorsement of the securities. The securities are products that are not simple and may be difficult to understand. This information includes or relates to figures of past performance. Past performance is not a reliable indicator of future results.

02/12/2022 06:40:13

 

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