Bitcoin Big Volatility Expected as Microsoft & Alphabet Earnings Hit Later Today

Bitcoin could be about to be tossed around on a sea of volatility as four of the Mag 7 stocks release Q1 earnings. As well as Microsoft and Alphabet, two other giant U.S. companies, Amazon and Apple, will also publish their earnings. The U.S. stock market could move strongly in either direction, depending on how the results are perceived by the market. Bitcoin is likely to get swept along into any euphoria/depression that follows.

Bitcoin back to $78K/$79K and retest of trendline

Source: TradingView

The short-term time frame for $BTC shows that the price is either going to hold above $77,000, or lose this support again and retreat to $76,000. Given that momentum has reset in other short-term time frames, the likelihood is that the price will continue to claw its way back up from here. A retest of the ascending trendline plus the $78K-$79K resistance level is a possible target.

If the 4 big Mag 7 companies pull off decent earnings across the board there is the chance that Bitcoin is buoyed up by potential strong gains in the U.S. stock market on Thursday. That said, the S&P Index is right up close to the top of an 8-year channel. It could break out, but the probabilities are of an eventual pullback. It would then be debatable whether Bitcoin could continue to pull out of its bear market if the stock market was falling.

Breakdown in daily RSI

Source: TradingView

The daily time frame reveals the $BTC price coming back to the $77,000 level. There has been no confirmation of the breakdown of the ascending trendline in this time frame, so it could be expected that this does take place. The price rise could even get back to $79,000.

To support this thesis, the indicator line in the RSI has fallen through the bottom of the current rising channel (red arrow). This indicator line could also rise back, confirming the bottom of the channel as resistance as it does so.

A bearish scenario for $60,000

Source: TradingView

If one conjectures that the stiff horizontal resistance band and the top of the bear flag hold the price below, the bearish scenario can be investigated in more detail. 

A price reversal from here would likely take the $BTC price back to the strong $74,000 horizontal resistance, and a crash through this would mean the price falling to the equally strong $66,000 horizontal support, together with the bear market trendline, and the bottom of the bear flag.

If this were to take place, it can be imagined that the Stochastic RSI indicators would have rolled over and would be falling back down. If the price fell all the way down to $60,000, with a rising 200-week SMA just above this, it could be that the weekly Stochastic RSI indicators might have fallen to the bottom again. A double bottom in the price action could then mark the bottom of this bear market once and for all. 

Some might say what about the bear flag? The measured move out of this would take the price all the way down to the low $40,000s. Be that as it may, bear flags often do not go down to their full extent, so this remains to be seen.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.