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Bearish Pennant Forms Amid Silvergate

Bitcoin’s fear and greed index has turned a bit negative in the past few days as concerns about its future remain.

  • Sell the BTC/USD pair and set a take-profit at 21,000.
  • Add a stop-loss at 23,000.
  • Timeline: 1-2 days.
  • Set a buy-stop at 22,760 and a take-profit at 23,500.
  • Add a stop-loss at 21,500.

The BTC/USD pair remained on edge after making a major bearish breakout on Friday. It continued to consolidate at around 22,400, which was significantly lower than the year-to-date high of over 25,000. Bitcoin is struggling amid concerns of interest rates and Silvergate Capital, a leading bank in the crypto industry.

The biggest crypto-related news was the likely implosion of Silvergate Capital, a leading player in the crypto industry. Last week, the company announced that it will delay its annual report and warned about its ability to continue as a going concern.

Further, the company suspended its USD transfer service, which is a major part of its business. At the same time, credit rating agencies downgraded the company’s credit rating to junk status. As such, investors believe that Silvergate will be the next big collapse after FTX, which filed for bankruptcy in 2022.

Bitcoin’s fear and greed index has turned a bit negative in the past few days as concerns about its future remain. Regulators have recently boosted their regulatory crackdown following the collapse of FTX and Terra Luna.

The other key concern is the bond market. Recent data shows that the American economy was doing well, meaning that the Fed has more room to hike rates. Inflation remains relatively sticky while the unemployment rate remains at its lowest point since 1953.

Bond yields have continued soaring in the past few days, with the ten-year sitting at 4%. The yield curve inversion has dropped to the lowest level in decades. The key data to watch this week will be the upcoming non-farm payrolls (NFP) data. A statement by Jerome Powell will also move the crypto and stock market.

The BTC/USD pair made a bearish breakout as I predicted last week when I pointed to the bearish breakout pattern that had been forming. In most periods, a bearish flag usually points to more downwards.

The pair has also formed a bearish pennant pattern, which is also a sell signal. It has moved below the 25-day and 50-day moving averages while the MACD is below the neutral point. The Relative Strength Index (RSI) is drifting upwards.

Therefore, the pair will likely have a bearish breakout as sellers target the key support at 21,000. A move above the resistance point at 23,000 will invalidate the bearish view.


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