This is a daily analysis of Coindesk analyst and chartered market technician Omkar Godbole.
Bitcoin
Rally has stopped and raises the possibility of a potential bearish technical formation: a double top.
A close study of the daily chart reveals that Bulls could not maintain a rally over the most important Fibonacci level of $ 122,056 Monday, a performance that just reflects a similar rejection on July 14, according to data source trading.
This double failure to establish a foothold over the key price, separated by a short withdrawal, is a characteristic of the double top pattern. The neckline of this pattern, drawn from the low $ 111,982, which was reached during the short withdrawal, is the most important level to look at the disadvantage.
A decisive feature below this level would confirm the double top distribution that potentially open the door for a sale to $ 100,000. This level has been reached by pulling the gap between the Twin Peaks and the neckline from the neckline level of what is known as the measured method of movement for calculating targets.
Early this year, BTC fell double in the vicinity of $ 100,000 and eventually fell to low under $ 75,000 in early April. The double peak consists of two tops separated by a trough and takes about two to six weeks to form. The gap between the two tops must be equal to or less than 5%, where the spread between the tops and the trough is at least 10%, according to technical analysis theory.
However, these are guidelines and not rules, which means that the background is more important – the pattern must be displayed after a prolonged uptrend to be valid, as is the case with BTC.
- Resistance: $ 120,000, $ 122,056, $ 123,181.
- Support: $ 114,295 (the 50-day SMA)$ 111,982, $ 100,000.
Bears get an upper hand in front of us CPI
The double failure of Bitcoin Bulls in maintaining winnings over $ 122,000 indicates a clear case of buyer fatigue, giving bears a significant upper hand as the market enters today’s CPI release.
This exhaustion of purchase pressure means that the market is now particularly vulnerable to a warmer than expected US inflation report to be paid on Tuesday. In other words, the moment of purchase is not strong enough to absorb the potential sales pressure triggered by an elevated CPI and the resulting decrease in bold rate cut. In this scenario, the market could experience a rapid decline.
Read more: Bitcoin $ 115K Bets sought after when Downside Fear Grips Marked for US CPI Report
