What’s Next for Bitcoin? Analyst Explains Key Technical and Fundamental Signals

03.08.2024

In a video released on August 2, popular pseudonymous analyst and trader Crypto Jebb provides an in-depth analysis of the current bearish indicators in the Bitcoin market and what they mean for the future of the cryptocurrency.

Introduction

Jebb notes that Bitcoin has recently experienced a significant drop, falling to $64,000 and further to a local bottom of $62,000. This decline was anticipated due to several bearish indicators that have been flashing over the past few days.

Source: TradingView

Key Technical Indicators

Bearish MACD Cross

One of the primary technical indicators Jebb highlights is the bearish MACD (Moving Average Convergence Divergence) cross on Bitcoin’s daily chart. This indicator suggests a potential shift from bullish to bearish momentum, indicating that the Bears are gaining control.

Crypto Jebb Oscillator

Jebb also discusses the Crypto Jebb Oscillator, a custom indicator he developed in partnership with Lux Algo. This oscillator showed a downtick recently, signaling that the bullish strength is waning and bearish pressure is increasing. The oscillator helps visualize the bullish and bearish acceleration, providing insights into market momentum.

Lux Algo Sell Signal

Another significant indicator is the sell signal from Lux Algo, which Jebb explains is a reliable tool for predicting market movements. The Lux Algo indicator showed a red sell signal, confirmed by a red trend catcher, indicating a strong bearish trend. He says tsignal suggests that Bitcoin could continue to experience downward pressure in the coming days.

Fundamental Factors

Non-Farm Payroll and Unemployment Data

Jebb highlights recent non-farm payroll and unemployment data from the U.S. Department of Labor. The data showed an increase in unemployment to 4.3%, which has contributed to market uncertainty. He says that this rise in unemployment, combined with other economic factors, has created a bearish environment for Bitcoin and other risk assets.

U.S. Stock Market Correlation

The U.S. stock market has also been experiencing a downturn, which Jebb notes is influencing Bitcoin’s price. He explains that the stock market’s performance often correlates with Bitcoin, and the recent drop in U.S. equities has added to the negative sentiment in the cryptocurrency market.

Short-Term and Long-Term Outlook

Short-Term Bearish Trend

Jebb emphasizes that Bitcoin is currently in a confirmed downtrend, with several indicators pointing to continued bearish pressure. He advises investors to be cautious and prepared for potential further declines, possibly to the $60,000 level or even as low as $55,000.

Long-Term Bullish Perspective

Despite the short-term bearish indicators, Jebb remains optimistic about Bitcoin’s long-term potential. He urges investors to maintain a long-term perspective and continue their investment strategies. He believes that the current downturn presents an opportunity to accumulate more Bitcoin at lower prices.

Political and Economic Developments

Support from Political Figures

Jebb discusses the growing political support for Bitcoin, mentioning that both former President Donald Trump and Senator Cynthia Lumis have proposed that the U.S. hold Bitcoin on its balance sheet. He believes this political backing could lead to increased institutional adoption and further legitimization of Bitcoin as an asset class.

Rate Cuts and Economic Policies

Jebb also covers recent developments in economic policies, such as the Bank of England’s decision to cut interest rates. He explains that lower interest rates could boost the stock and cryptocurrency markets by making borrowing cheaper and stimulating economic growth. He suggests that similar rate cuts from the U.S. Federal Reserve could lead to significant rallies in both equities and Bitcoin.

Actionable Advice for Investors

Dollar-Cost Averaging

Jebb advises investors to continue dollar-cost averaging into Bitcoin and other strong cryptocurrencies. He suggests increasing the weekly or monthly allotment for Bitcoin investments by 10-25% during this bearish phase. This strategy, he says, allows investors to accumulate more Bitcoin at lower prices, potentially benefiting from future price increases.

Avoiding Panic Selling

Jebb cautions against panic selling in response to short-term market fluctuations. He emphasizes the importance of maintaining a long-term investment perspective and not reacting impulsively to temporary market downturns. He encourages investors to stay calm and focused on their long-term goals.

Ethereum and Other Cryptocurrencies

Ethereum’s Performance

Jebb also touches on Ethereum’s recent performance, noting that it has been in a downtrend similar to Bitcoin. He attributes this to factors such as the recent launch of Ethereum ETFs, which have seen mixed reactions in the market. Despite the current bearish trend, Jebb believes that Ethereum has strong long-term potential, particularly as the Ethereum ecosystem continues to grow and evolve.

Altcoins and Diversification

In addition to Bitcoin and Ethereum, Jebb discusses the importance of diversifying into other altcoins. He advises investors to carefully research and choose altcoins with strong fundamentals and growth potential. He says diversification can help spread risk and provide exposure to a broader range of opportunities in the cryptocurrency market.