FX.co ★ Technical Analysis of BTC/USD for February 22, 2023

Crypto Industry News:

It has been several days since Kraken, one of the largest cryptocurrency exchanges in the world, stopped providing the staking service to US clients and was forced by the SEC to pay a USD 30 million penalty.

Former Kraken CEO Jesse Powell disagrees with the decision of the US financial market regulator. In his opinion, the authorities allow fraudsters to operate and hinder the functioning of honest entrepreneurs.

Although it sounds like a typical complaint of a businessman punished by officials, there is something to it. After all, the FTX exchange - although built on rotten foundations - operated on the market for a few years. Politicians willingly accepted donations from Sam Bankman-Fried, and the company's CEO himself met with important people from the White House.

Powell sees all of this as a cynical plan to destroy the capital that has been invested in the cryptocurrency ecosystem. This will stop blockchain adoption and at the same time enable attacks on honest entities.

This chilling theory, however, does not come out of thin air. It is the result of previous events. Powell and Caitlin Long, CEO of Custodia Bank, warned regulators about some suspicious transactions in the cryptocurrency industry.

Technical Market Outlook:

The BTC/USD pair had made a new local high at the level of $25,257 and after a short period of consolidation reversed sharply lower to make a local pull-back. A sustained breakout above the level of $25,000 on BTC/USD is still needed in order to extend the rally towards the key mid-term technical resistance seen at $25,442, so there is still a room to the upside for bulls. However, the bears had manage to break below the short-term trend line support and are heading lower towards the 38% Fibonacci retracement of the last wave up located at $23,800. In a case of a breakout below this retracement level, the next target for the corrective cycle are $23,346 (50% retracement) and $22,868 (61% retracement). The weak and negative momentum on H4 time frame chart supports the short-term bearish outlook for BTC.

Weekly Pivot Points:

WR3 - $25,667

WR2 - $24,967

WR1 - $24,709

Weekly Pivot - $24,259

WS1 - $24,000

WS2 - $23,550

WS3 - $22,841

Trading Outlook:

Despite the recent rally, 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 gamechanging level for bulls is located at $25,442 and it must be clearly violated for a valid breakout in the longer term.