Despite very poor sentiment for Bitcoin (BTC) that is being felt across the entire market, Bitcoin still looks incredibly bullish. This current market shakeout could be the one before the king of the cryptocurrencies finally heads skywards. Are you still in this trade?
Fear still pervades the market
Sentiment for Bitcoin is still very much in the region of fear. In the crypto press and across social media news such as “the whales are selling”, is rife. The Fear and Greed Index is still reading Fear, at a score of 31. Of course, this is better than the Extreme Fear, and the score of 17 that was registered last week, but even so, fingernails are being bitten, and the nerves are certainly getting wracked.
The Mt. Gox distributions are getting distributed, and the traditional stock market still has the jitters after the Japanese melt-down. If the whales are also selling, isn’t this the time to get out?
If in doubt, zoom out
Source: TradingView
If you spend a lot of your time looking at the Bitcoin chart and feeling sick in the pit of your stomach as $BTC falls another $500, you may want to step back, look at Bitcoin in a different way, and just start chilling. One of the old adages among experienced traders is: “If in doubt, zoom out.” So instead of obsessing over a dump on the 1-hour chart, zoom right out into more of a macro view.
Starting on the weekly, it can be seen that the $BTC price is still within its bull flag. The recent yen carry trade sell-off did see the price fall through the bottom of the flag, but this was very short-lived, and $BTC is comfortably back in the middle of the flag now.
It can also be seen that this wick-down retested the 0.618 fibonacci, which is an exceedingly important level. The stochastic RSI is coming back to the bottom, signalling that upside momentum will be coming back into the $BTC price, perhaps in the next two to three weeks.
A solid base is forming
Source: TradingView
Expanding the view even further, on the 2-week chart, it can be seen that the candle bodies are beginning to form a base around the $59,000 to $61,000 level (orange lines). This is in accordance with support at the top of the 2021/2022 bull market, and also has confluence with the top of the 0.786 fibonacci. The 2-week stochastic RSI has crossed up, although confirmation will be needed at the end of this 2-week period.
Things look bullish.
Eventual bullish breakout a big possibility
Bitcoin went from $25,000 to nearly $74,000 in the space of only seven months. After such a heroic rally, a long period of consolidation was desperately needed. Can this period extend further? Yes, it can, but an eventual bullish breakout is certainly a big possibility.
If $BTC can break out of this flag, and the price can hold above $71,000, the next stage of the bull market can take place. $101,000 is the next big fibonacci level at 1.168. Bitcoin still looks incredibly bullish.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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