FX.co ★ Technical Analysis of BTC/USD for October 25, 2022

Crypto Industry News:

According to Tesla's latest Q3 earnings report filed with the U.S. Securities and Exchange Commission, the electric vehicle manufacturer has revealed that it has invested a total of $1.5 billion in Bitcoin since early 2021. Of this amount, the company now has a $170 million unrealized loss resulting from the change in the fair value of its investment. This is offset by a $64 million profit on Bitcoin profits at various times in the past two years, leading to a net loss of $ 106 million by the end of the third quarter.

Tesla's losses, however, did not significantly affect the company's core business. The electric vehicle manufacturer's profits grew 169% year-on-year from $3.3 billion in the first nine months of 2021. However, the company only has around 218 million in Bitcoin on its balance sheet.

According to the law, digital assets are considered intangible assets with an indefinite useful life. Consequently, any decline in their fair value will require Tesla to recognize an impairment loss, while the company does not make upward adjustments for any price increases up to the point of sale. Under this favorable tax treatment, losses can be deducted from profits to reduce tax liability, while capital gains are not taxed until sale.

Technical Market Outlook:

After the BTC/USD pair made the market made a Shooting Star candlestick pattern at the level of $19,678, the market reversed and is consolidating around the local trend line. The nearest technical support is seen at $19,248 and $19,078, however, the target for bears is the swing low and range low seen at the level of $18,150. The supply zone located between the levels of $20,221 - $20,580 (marked as a red rectangle) is very important for bulls from a technical point of view, because only a sustained breakout above it would change the outlook to more bullish, so please keep an eye on this zone for a possible breakout towards the next target seen at $22,410.

Weekly Pivot Points:

WR3 - $20,025

WR2 - $19,682

WR1 - $19,461

Weekly Pivot - $19,340

WS1 - $19,119

WS2 - $18,997

WS3 - $18,655

Trading Outlook:

The down trend on the H4, Daily and Weekly time frames continues without any indication of a possible trend termination or reversal. So far every bounce and attempt to rally is being used to sell Bitcoin for a better price by the market participants, so the bearish pressure is still high. The key long term technical support at the psychological level of $20,000 had been violated, the new swing low was made at $17,600 and if this level is violated, then the next long-term target for bulls is seen at $13,712. On the other hand, the gamechanging level for bulls is located at $25,367 and it must be clearly violated for a valid breakout in the long term.