This market look will focus on the short-term as well as the long-term outlook of Bitcoin, the german stock index DAX, and Oil WTI through daily and weekly timeframes. Let’s dive in.
Bitcoin is going through the worst period in history. RSI indicator levels are at their lowest point, many crypto projects, hedge funds, and venture capitals (VCs) are struggling to survive. What’s most important – BTC got below its all-time high level from the previous cycle in 2017 for the first time ever. This has never happened before. Moreover, Bitcoin is falling hard 14 weeks in a row, not making a single weekly candle close above the previous one. This could change soon.
Although Bitcoin got below the $20,000 mark for a short while, it might simply be a false breakout. Now there’s a chance BTC will close a weekly candle above the previous one’s high, marking a possible pullback or total reversal. The price basically absorbed all the bad news, and now it might be ready for another at least short bull run. Summer times mostly have low volatility, so no other market crashes are expected. On the other hand, price growth to the broken level of $28,000 is very probable in the next few weeks.
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While everything suggests otherwise, Oil is actually entering a bear market again. Slowly but surely. In the most volatile times, we have witnessed a fast rise at the beginning of 2022 by almost 100%, reaching $130. Then there was a consolidation that took a few months that more or less looked like a bull trap, and investors probably accumulated long positions as JP Morgan warned Oil could go to a stratospheric $380!
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While JP Morgan may be right about many things, charts say otherwise. The reality is Oil broke a critical trend line, and the market has started to make lower highs and lower lows. This is the most bearish sign after reaching $130 all the way from $0 in April 2020. Oil WTI is one of the most overbought commodities out there, and it will probably make a lower low somewhere in the zone of $85 – $90.
DAX hit its peak exactly at the end of 2022 when it retested the resistance of 16,350. Since then, there has been a significant bear market present, while the index is down 20% from its all-time high. Currently, DAX hit strong support, from which it’s turning back up and forming a possible double bottom. This could at least lead to a temporary growth back to the trend line and an unfilled gap between prices of 13,750 and 14,250. RSI indicator also shows signs of bottoming out, so a further uptrend is possible.
However, stock markets are in an apparent recession right now, and rising interest rates could further hurt their growth. That is why investors should stay cautious about long-term investing because lower lows will probably come sooner or later. In the short term, a slow upward movement is expected throughout the summer.
There is a strong negative correlation between oil and stock indexes, so if there is a bullish signal on DAX like right now, and a bearish signal on Oil, there’s a high probability, it will work out. Bitcoin has a high correlation with stocks as well. Cards have been dealt; now let’s wait for the playout.