Things Still Looking Good for Bitcoin
Despite the recent fluctuations, things are still looking good on the Bitcoin current rally. China has announced more easing to come, which will also bring more liquidity into the global monetary system as a whole, while other central banks will no doubt be following suit.
The U.S. Spot Bitcoin ETFs raked in a whopping 8.85K BTC on Monday, which in dollar terms is around $555.9 million. This is the largest single net inflow day since early June and is nearly 20 times the daily issuance of newly mined Bitcoin.
Larry Fink, CEO of Blackrock (NYSE), the largest holder of Bitcoin among U.S. ETFs, recently stated that Bitcoin was an asset class in itself, predicting that the alpha cryptocurrency will become “as big as the US housing market,” regardless of who wins the presidential election.
Bitcoin Faces Rejection
All this said, from a technical analysis perspective, possibly affecting the short to medium term, Bitcoin (BTC/USD) is at a very critical juncture. If this current rally is rejected once again from the top trend line of the bull flag, there is the potential for another downside swing, and how far could this drop the price?
The 4-hour chart for Bitcoin displays the breakout of the descending trend line on Monday. The price shot up quickly from the breakout, making 5.3% before coming to a halt at the upper trend line of the bull flag.
On top of the rejection, the price also failed to make a new local high, which, if this stands, could make the rejection even more telling. Looking at the potential downside, the Fibonacci levels for this move are pointing to $63,600 at the 0.382, $61,800 at the 0.618, and $60,500 at the 0.786. There is also the possibility that the price comes down to retest and confirm the breakout trend line.
Price Dip on the Way?
Looking at the more positive side of things, it can be seen that the Bitcoin price appears to be making another attempt to claw its way back to the top of the flag. It’s possible that the bulls could be successful, and that the price is able to make a local higher high and even break through the top of the bull flag. However, the Stochastic RSI momentum indicator is showing a top on all the short-term time frames. For this reason, the Bitcoin current rally is probably more likely to dip in the next few hours.
Bitcoin at Huge Resistance
On the weekly time frame, it can be seen how the current horizontal resistance level at around $65,700 coincides with the top of the bull flag. With the short-term momentum just about exhausted, this really adds fuel to the bears.
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