Bitcoin (BTC) faces a “breakdown” and distribution despite a new macroeconomic paradigm being around the corner.
That was one of the conclusions of quantitative Bitcoin and digital asset fund Capriole Investments, which, in its latest update, warned that Bitcoin was “not yet” ready to flip bullish.
Capriole: Bitcoin fundamentals say “not yet”
United States equities are booming, and the Federal Reserve may be at the end of its most stringent monetary tightening ever — but Bitcoin has failed to react.
As traders predict a return to levels closer to $25,000 or lower, Capriole believes that more time is necessary for the new macroeconomic reality to sink in.
“At the same time that Bitcoin has been faltering, the S&P500 has had its longest winning streak in years and the Fed has essentially paused rate hikes at what is now the tightest monetary policy regime on record,” founder Charles Edwards writes.
“In essence we are at a macro pivot point and (all else equal) entering a new monitory policy regime which should be more favorable for Bitcoin over the coming years. This is a positive backdrop for Bitcoin. But today the technicals and fundamentals are telling us ‘not yet.’”
While suggesting that the U.S. greenlighting a Bitcoin spot price exchange-traded fund could turn the situation around, Bitcoin remains pinned below resistance on both long and short timeframes, Edwards concludes.
“The next support levels are $28K, $24K and low-$20Ks; with each offering significantly better relative opportunity,” he continued.
As such, utilizing the Wyckoff method, “distribution” currently characterizes BTC price action.
“Low Timeframe Technicals: Breakdown! Support at $30K failed and a new bearish trend has emerged,” Edwards summarizes.
“This is a low timeframe Wyckoff distribution. If the magnitude of the downswing matches the upswing, the target of this move is circa $25K.”
BTC price taps 6-week lows
As Cointelegraph reported, Capriole is far from the only market participant predicting BTC price conditions to get worse before they get better.
Related: Bitcoin loses $29K as traders flag key BTC price levels to watch next
On-chain monitoring resource Material Indicators this week argued that multiple lower levels remain “possible” for Bitcoin after BTC/USD failed to rally on the back of last week’s U.S. macro data.
This showed inflation slowing faster than predictions, notionally increasing…
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