TA of the Day: Bitcoin Hits $70,000 But Reverses Sharply. A Minor Blip or a Major Trend Shift?

Bitcoin price rose above $70,000 for the first time since early June, but was met with a wave of selling, causing it to fall by more than 3%.

It is not yet clear what caused the price move, but it may be related to the US government’s transfer of more than $2 billion in confiscated bitcoins linked to the Silk Road dark web marketplace.

This massive transfer has raised fresh concerns about increased selling pressure on the cryptocurrency.

Is the crypto market overreacting? 🤔

It’s hard to be downright pessimistic after one of the most significant cryptocurrency events took place over the weekend.

Donald Trump speaks in Bitcoin Conference 2024US President Donald Trump has vowed to keep Bitcoin seized by the US government and never sell it, and has proposed creating a national strategic reserve of Bitcoin to keep up with global competitors like China.

The US government owns more Bitcoin than any other government in the world, worth nearly $14 billion.

In his words:

“Never sell your bitcoin, If elected, it will be the policy of my administration, the United States of America, to retain 100% of all Bitcoin currently held or acquired by the US government in the future.

He likened the cryptocurrency industry to the early steel industry, noting that it could surpass gold in value.

And that’s not all!

Beyond Trump, there were other noteworthy insightful predictions and bold policy commitments. Other key highlights include:

• Michael Sailor, co-founder of MicroStrategy, predicts that the price of Bitcoin will reach $13 million per coin By 2045, it is believed that the value of Bitcoin could range from $3 million in the event of a fall to $49 million in the event of an increase!
• Senator Lummis announced a bill to Strategic Bitcoin Reserve Aims to Hold 1 Million Bitcoins.
• RFK Jr. proposed issuing an executive order to the Treasury Department to purchase 550 BTC per day to reach 4 million BTC reserves.
• The Democratic National Committee (DNC) is seeking to reset relations with the crypto industry.
• Cantor Fitzgerald announces $2 billion cryptocurrency funding initiative.
• Michigan Pension Fund disclosed Buy $6.6M worth of BTC.
• Franklin Templeton is planning to launch a BTC ETF in Japan.
• Wyoming is creating Bitcoin Research Institute.
• Brevan Howard’s Crypto Fund supports companies that hold cryptocurrencies as treasury assets.
• The SEC has approved Grayscale’s BTC mini-fund.
• Unbound has introduced a crypto-based path to EU citizenship.
• Hong Kong is considering using Bitcoin as a sovereign reserve asset.

Bitcoin fundamentals look very bullish, but what about the technical indicators?

you welcome in Teaching Assistant of the Day (TAOTD)! 👋

Here is the daily chart:

📈 Technical analysis of the BTC/USD pair on the daily chart

Using the technical analysis concepts we covered in our Forex course, let’s analyze the BTC/USD pair.

Simple Moving Averages (10, 50, 100, 200):

• 10 period simple moving averageIt is located at 67,145.71. The current price is: above This level indicates short-term bullish momentum. The slope is to the topindicating short-term strength recently.
• 50 period simple moving averageIt is located at the level of 63,370.86. The price is: above This level indicates medium-term bullish momentum. The slope is to the topenhancing strength in the medium term.
• 100 period simple moving averageIt is located at 64,583.61. The price is: above This level indicates medium-term bullish momentum. The slope is slight. to the top.
• 200 period simple moving averageLocated at 60,872.52. The price is good. above This level indicates long-term bullish momentum. The slope is to the topindicating a continuation of the long-term upward trend.

If you are new to moving averages, read Pipsology School’s lessons on how to use moving averages.

Relative position of moving averages:

• the 10 period simple moving average currently above the 50 period simple moving averagethat above the 100 period simple moving averageand all of them above the 200 period simple moving averageThis alignment indicates strong bullish momentum across short, medium and long term time frames!

Random oscillator:

• %K RandomThe current reading is 65, indicating that the market is approaching Overpriced conditions.
• Random %DThe current reading is 79, indicating that the market is actually in good shape. Overpriced This indicates that the price may face resistance soon and may be about to pull back.
• The last intersection: The blue line recently crossed below the orange line, which often signals a potential shift in momentum. This crossover occurred in the overbought zone (above 80), which some traders interpret as a bearish signal.

If you are new to the stochastic oscillator, read our Pipsology School lessons on the stochastic oscillator.

🕵️ Key Notes

Price movement:

• strong to the top The trend from late January to early March, where it rose from around 40,000 to an all-time high (ATH) of over 73,000.
• a period Merge A slight decrease from March to May, mostly between 60 and 70 thousand.
• sharp revision In June, it fell to about 56,000.
• a Recovery Starting in July, prices will rise again to around 70,000.
• General trend: The price was volatile but generally bullish, with significant highs and lows.
• Upward momentum: The recent price action shows strong upward momentum, with more green (bullish) candles than red (bearish) candles in the recent upward move.
• Price range: The price ranged between about 40 thousand and 73 thousand during this period.

Support and resistance levels:

Main field:

• 66000 – 68000This area has often acted as both support and resistance, indicating that it is a key battleground between buyers and sellers.

Supports:

• Immediate support is located at 67,145.71 (10-period simple moving average) and 64,583.61 (100-period simple moving average).
• 64000 – 65000This area has acted as support and resistance at various points, and has recently acted as a support level in the recent upward move.
• 60,000This seems to be an important level of psychological support that has been tested many times.
• 56,000 -58,000This area provided strong support during the July decline and could be a key level to watch if the price drops again.

resistance:

• 70,000: This appears to be an important psychological and technical resistance level. The price has approached or briefly touched this level several times but has struggled to hold it consistently. It is currently acting as immediate major resistance.
• 72000 – 74000There appears to be a resistance area in this region, as evidenced by the price peaks in March and June.

Moving averages:

• The 10-period and 50-period simple moving averages are currently acting as short-term support levels, while the 100-period simple moving average provides intermediate support, and the 200-period simple moving average provides long-term support.

Random oscillator:

• The random oscillator is present in Overpriced The area indicates the possibility of Swipe back Or monotheism.
• Overbought conditionsThe indicator has reached overbought levels (above 80) several times in the recent past, coinciding with price peaks or consolidations.
• Momentum confirmation: The overall movement of the Stochastic indicator from lower to higher levels over the past month is consistent with the upward price action, confirming the bullish momentum.
• Possible warning: The recent decline from overbought levels can be interpreted as a warning signal that the current bullish momentum may be slowing down.

Market structure, market composition:

Based on the price action shown in the chart, the current market structure for Bitcoin appears to be rising In general, with some key features:

• Higher dips: The chart shows a series of higher lows since the bottom in July, a classic sign of an uptrend.
• recent uptrendThere is a clear uptrend from the July lows to current price levels.
• Unification near all-time high: The price is consolidating near its recent highs, which could be seen as a bullish signal if it manages to break above the resistance.
• break the frameThere was a significant rise in the Stochastic indicator above the previous resistance level at 63,800 in early July, indicating a continuation of the uptrend and strengthening of the bullish momentum.
• Change personality (chouch):ChoCh will be observed if the price drops below the recent higher low at 63n400, indicating a potential shift in market sentiment from bullish to bearish.

🤔 Possible trade scenarios

He is BTC/USD Buy or Sell?

The following trading scenarios are provided for educational purposes only. Since they do not include full risk management practices, they are not intended to serve as actual trading recommendations, but rather as food for thought to help you generate your own trading idea.

Long bias:

• Entry pointConsider entering a long position if the price finds support near 67,145 and shows signs of a bounce, such as a bullish candlestick pattern or positive divergence on the stochastic indicator. Additionally, a break above the resistance level at 70,000 could signal a continuation of the uptrend.
• Stop lossConsider setting a stop loss below the support level at around 66,000 to manage risk.
• GoalWe expect a move towards the previous high around 74,000, or target a new all-time high around 80,000.
• RationaleIf the price manages to break the 70,000 resistance level and hold above it, it could signal the start of a new uptrend. The recent price action shows strong bullish momentum, and breaking the 70,000 level could trigger more buying.

Short bias:

• Entry pointConsider entering a sell position if the price fails to break the resistance level at 70,000 and shows signs of bearish momentum, such as a strong bearish candlestick pattern or the stochastic oscillator moving below 80.
• Stop loss:Place a stop loss above the recent high at 71000 to manage risk. This level is crucial as a break above it would invalidate the bearish setup.
• GoalThe initial target could be the support level at 67,145.71. If the downward momentum continues, expect further decline towards 64,583.61 or even lower at 60,000.
• RationaleIf the price fails to break the 70,000 level and shows signs of rejection (such as a bearish engulfing candle), it may indicate exhaustion of the recent uptrend and a possible pullback.

📝 TAOTD Summary

• directionThe long-term trend appears to be bullish with a series of higher highs and higher lows, but the short-term trend is showing some resistance around the recent high at 70,000.
• Main levelsShort term support at 67,145, resistance at 70,000 and very strong resistance at 72,000.
• PaidThe Stochastic indicator indicates an overbought condition, indicating a possible short-term pullback or consolidation.
• market structure, market compositionThe latest BoS indicator indicates: continuation On the other hand, monitoring a potential ChoCh is important to determine future price action. A ChoCh could occur if the price drops below the recent high low at 63400, indicating a potential shift in sentiment from bullish to bearish. bearish.
• Moving average analysisThe upward slopes on the 10, 50, 100 and 200 period simple moving averages indicate strong bullish momentum across different time frames. The relative position of the moving averages shows strong bullish momentum in the short, medium and long term.

This content is for informational purposes only and does not constitute investment advice. Trading in any financial market involves risk. Please read our Risk Disclosure to ensure you understand the risks involved.