Bearish view
- Sell the BTC/USD pair and set a take-profit at 15,787.
- Add a stop-loss at 17,300.
- Timeline: 1-2 days.
Bullish view
- Set a buy-stop at 17,100 and a take-profit at 18,000.
- Add a stop-loss at 16,000.
Bitcoin prices continued consolidating as the prolonged cryptocurrency winter continued. The BTC/USD price was trading at 16,765 on Wednesday, a few points below this week’s high of 17,375. Bitcoin has plunged by over 70% in 2022.
No signs of BTC sell-off capitulation
The BTC/USD price remained in a tight range as concerns about the coin continued. In a statement, analysts at Standard Chartered warned that BTC could crash to about $5,000 in 2023. The report cited the ongoing plunge of other financial assets like stocks and bonds. This crash, coupled with rising risks of crypto bankruptcies will likely lead to a lack of confidence in digital assets.
Some of these challenges in the sector have started emerging. FTX, the then second-biggest crypto exchange, collapsed last month. And this week, Coinbase’s CEO warned that the company’s loss would increase by over 50% as the trading boom fades.
Meanwhile, on-chain statistics show that many crypto traders are losing confidence in the coin. According to Bitfinex, the total number of Bitcoins in exchanges has dropped to about 2.3 million. At its peak in 2021, there were over 3.1 million coins in exchanges.
This decline is partly because many investors have moved their coins to self-custody wallets. However, a closer look shows that balances in such wallets have not grown that much. This is a sign that there has been more selling going on.
Most importantly, demand from new Bitcoin buyers has eased in the past few months. A closer look at website traffic data shows that visitors to exchanges have dropped sharply this year. And according to alternative, the Bitcoin fear and greed index has dropped to about 23, which is a sign that investors are still fearful.
BTC/USD forecast
The 4H chart shows that the BTC/USD exchange rate has been in a consolidation phase in the past few days. It remains slightly below this week’s high of 17,420. A closer look shows that its volume has been in a downward trend.
The pair is consolidating at the 25-day moving average while the Awesome Oscillator has moved slightly below the neutral point. The stochastic oscillator has moved to the oversold level. Therefore, at this stage, the outlook for the pair is neutral with a bearish bias. A potential decline to the important support at 15,787 cannot be ruled out. On the other hand, a move above the resistance at 17,250 will be a sign that there are still more buyers left.
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