FX.co ★ Technical Analysis of BTC/USD for January 13, 2022

Crypto Industry News:

Former Twitter CEO and Block founder Jack Dorsey announced plans to create a "Bitcoin Legal Defense Fund" with Chaincode Labs co-founder Alex Morcos and Martin White, a scientist at the University of Sussex. The fund will help provide legal defense to Bitcoin developers who are "currently subject to multilateral litigation."

The announcement describes the Bitcoin Legal Defense Fund as "a non-profit entity that aims to minimize legal problems that discourage developers from actively developing Bitcoin and related projects." The main purpose of this fund is to defend developers from lawsuits regarding their activities in the Bitcoin ecosystem.

Initially, the fund will include part-time volunteers and lawyers that developers will be able to "take advantage of if they so wish". It also states that "the board of the fund will be responsible for determining which lawsuits and defendants it will assist."

At the moment, the fund is not seeking to raise additional money for its operations, but will do so on the instructions of the board of directors if necessary for further legal action or personnel payments.

The first project of the fund will be to take over the defense of Ramona Ang's "tulip trade lawsuit" against developers for alleged misconduct in accessing the Bitcoin resource.

Dorsey, who stepped down as Twitter CEO in late November 2021, has been a long-time supporter of BTC. It remains unclear whether Dorsey has left the social media company to focus on Block's (formerly Square) plans to develop a decentralized crypto exchange.

Technical Market Outlook

The BTC/USD pair has bounced from the key long-term technical support located at the level of $39,555, broken out of the short-term descending channel and is heading up towards the 38% Fibonacci retracement level seen at $44,948. The intraday technical resistance is seen at the level of $44,000, but the key short-term technical resistance is located at the level of $45,367 and $45,669. Despite the recent complex and time consuming corrective decline in form of ABCxABCxABC pattern, the larger time frame trend remains up and only a clear and sustained breakout below the wave C low at $39,555 would change the outlook to bearish again.

Weekly Pivot Points:

WR3 - $52,467

WR2 - $50,030

WR1 - $45,792

Weekly Pivot - $43,016

WS1 - $38,361

WS2 - $36,105

WS3 - $31,712

Trading Outlook:

The ABCxABCxABC complex corrective cycle is still in progress and is much more complex and time-consuming than anticipated. According to the long-term charts the bulls are still in control of the Bitcoin market and the next long term target for Bitcoin is seen at the level of $70,000. This scenario is valid as long as the level of $39,474 is clearly broken on the daily time frame chart (daily candle close below $39,000 would be considered as a long-term trend change due to the lower low placement).