Only hours remain until Q1 2022’s close for Bitcoin price action. With the important quarterly candle set to close tonight, let’s look at what technicals might say about the direction of the next quarter.
Bitcoin Q1 2022 Closes
The tone for the coming year is often set by the performance of the first quarter. Poor Q1 results in investments are a sign of a troubled year. Considering the fact that Bitcoin price is now above $45,000 after touching $32,000 this quarter, it is tough to say the performance has been “poor” by anything other than crypto standards.
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A long wick has been left behind as the cryptocurrency recovered almost 40% from the lowest point. The long wick is a sign that buyers have stepped up significantly before the quarter ends. In Q1 2022, buyers were able increase their capacity more than the bears in last quarter. By comparison, the bearish candle to close 2021 was just 30%.
The quarterly RSI rebounded from the moving average. Source: TradingView.com, BTCUSD| Source: BTCUSD on TradingView.com
These standards might indicate that bulls still hold the advantage. The quarterly Relative Strength Index, which was able surpass the RSI moving average in bear markets past, is also a benefit.
These lines have held for a full year in Bitcoin | Source: BTCUSD on TradingView.com
A comparison of past bear markets using Ichimoku also shows that, after every major cycle peak both the base line and the conversion line are immediately lost in the opening quarter-end candle. Bitcoin’s support should continue to be strong if it holds above the important indicators for one year.
Source: BTCUSD on TradingView.com| Source: BTCUSD on TradingView.com
Donchian channels that act as an envelope for price action show bullish behavior similar to other cycles. The 2019 stop was precisely at this middle level. The key level was held by the previous quarters.
The price action of the Super Guppy bands is higher than that of Price Action. Source: BTCUSD at TradingView.com| Source: BTCUSD on TradingView.com
Super Guppy’s quarterly report suggests that Bitcoin prices have broken through several levels of support but were still able to maintain above the most extreme line. This could be a retest scenario that leads to an increase.
Is Bitcoin at its bottom? CMF may suggest that it has. Source: TradingView.com, BTCUSD| Source: BTCUSD on TradingView.com
The worst has already happened to holders hoping for bottom. Nearly at the exact same level as 2018’s bear market bottom, the quarterly Chaikin Money flow reached its lowest point. The Bitcoin price plummeted 50%, after falling to $20,000 from $6,000 earlier. This caused widespread panic across the crypto market.
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A similar capitulation could have occurred at two major peaks with more than half-way corrections, but the grind was slower than in past corrective phases. This, and several bullish quarterly signals suggest that the remainder of the year has a good chance to be green.
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Featured image taken from iStockPhoto. Charts from TradingView.com