Bitcoin (BTC) rebound incoming

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As a seasoned researcher with over a decade of experience in the financial markets and a keen interest in cryptocurrencies since their inception, I can confidently say that the recent correction in Bitcoin’s price is not a cause for concern but rather a healthy sign of its resilience.

After a 7.6% increase in the BTC price on Friday, some investors and traders may have felt let down as the upward trend seemed to slow down in the subsequent days. Yet, such a retracement following a surge is quite typical, and it’s probable that Bitcoin will bounce back shortly.

A perfectly healthy correction

No asset just goes straight up. The latest price action from Bitcoin is par for the course, and a very healthy way for the king of the cryptocurrencies to eventually get back to the all-time high. 

On Friday, the significant increase in Bitcoin’s price was approximately 7.6%, equivalent to around $4,500. This substantial rise is currently being digested by the market. Once this absorption phase ends, there’s a possibility that Bitcoin could continue its present upward trajectory.

Renewed momentum should encourage a bounce

By observing Bitcoin’s current trend, it appears that after encountering resistance at $65,000, the price has started to decline and is moving towards the upper boundary of an ascending triangle formation. This could potentially be a spot for a rebound, possibly accompanied by a short dip to the significant horizontal support level around $61,000.

On the current and 8-hour charts, the Stochastic RSI (a momentum indicator) appears to have hit a bottom. This suggests that the upward momentum in the Bitcoin ($BTC) price may return shortly.

Strong support

In the broader, weekly perspective, the significance of the price level around $61,000 as a potential support becomes clear. This important support is additionally reinforced by the 0.382 Fibonacci retracement, situated slightly beneath. Although a rebound might occur from the present area of support, it’s crucial to keep in mind that a decline towards the primary support at $61,000 remains possible. Furthermore, notice how well the 0.618 Fibonacci line aligns with the support at $52,000.

RSI downward trend must be broken

At the chart’s base, the Relative Strength Index (RSI) indicates a consistent downward trajectory that goes as far back as just before the record high. This downward slope needs to be disrupted. The upcoming weekly close will be significant in determining whether the indicator line ends above or below the trend line. If it’s above, we could start seeing a reversal of this downward trend; however, if it’s below, this ongoing rally might come to an end prematurely.

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2024-08-27 12:32