Bitcoin is now staying in consolidation above 39636 short term bottom, after quickly defending 40k handle. Considering that it’s sitting just above 39559 structural support too, the consolidation could extend for a while. But outlook will stay bearish for another fall to 61.8% projection of 68986 to 41908 from 52101 at 35366 before completing the decline from 68986 high.
The timing of the downside breakout will depend on the eventual reaction to 4 hour 55 EMA (now at 43211) which it’s struggling with. A strong break above 4 hour 55 EMA will stronger rebound to 55 day EMA (now at 48230) first, and rejected there to bring down trend resumption. Meanwhile, rejection by the current level could bring downside breakout rather quickly through 396363 to the mentioned 35366 target.
China’s rate cut failed to lift HSI
China’s rate cuts were not enough to lift investor sentiment in the region. PBoC lowered its one-year medium-term lending facility rate by 10bps to 2.85%. The seven-day reverse repurchase rate was also cut by 10bps to 2.1%. They’re the first rate cut since April 2020.
Also, the PBoC injected more liquidity by offering 700 billion yuan of MLF loans, exceeding the 500 billion yuan maturing, and added 100 billion yuan with seven-day reverse repurchase agreements, more than the 10 billion yuan due.
Hong Kong HSI closed down -165 pts or -0.68% at 24218.03. Downside momentum has been diminishing since mid December. Yet there is no clear sign of bullish reversal. HSI is still inside medium term falling channel. Another fall remains in favor to extend the down trend from 31183.35 through 22665.25 low.