As a seasoned analyst with over two decades of experience navigating global financial markets, I’ve seen more than my fair share of geopolitical and economic shocks. The current state of affairs in the Middle East, Ukraine, and Taiwan has undoubtedly added another layer of complexity to Bitcoin’s price movements. However, I remain cautiously optimistic about Bitcoin’s potential to reclaim lost ground and move back towards the top of its bull flag.
In the midst of escalating Middle Eastern conflicts, Bitcoin has experienced a downturn, yet the level of support around $60,000 has remained steady so far. At present, Bitcoin seems to be bouncing back, leading some analysts to wonder if it can now regain lost territory and ascend once more towards the peak of its bullish formation.
Geopolitical and economic shocks could still affect Bitcoin
In the present unpredictable world, financial markets must adapt to functioning within a context where conflicts in the Middle East, turmoil in Ukraine, or tension over Taiwan might unexpectedly intensify. This could lead to shocks in any of these regions, ranging from escalating crises to rare, unforeseen incidents similar to black swan events.
Despite the fact that Bitcoin is often viewed as a risky investment by many, there are valid counterarguments. Consequently, it’s likely that the volatility of this leading cryptocurrency will persist. Unlike traditional markets which might drop by 1% to 2% with unfavorable news, Bitcoin may experience significantly more severe declines under similar circumstances.
Bitcoin price starting to recover
In simpler terms, the cost of one Bitcoin (BTC) against the U.S. dollar has begun to rebound following its recent adjustment. As you can see in the chart provided, the BTC price dropped to a significant horizontal support at around $60,000. This level faced persistent pressure from Tuesday until Thursday. Nevertheless, it withstood the test as Bitcoin investors stepped in to boost the price whenever it fell.
Today marks a significant change in direction as Friday saw a breach of the previous downward trend line. It seems we might be looking at further upward movement from this point onwards. Our initial goal is reaching the 0.382 Fibonacci level around $62,430, a price point where resistance was previously encountered.
In simpler terms, the Fibonacci levels have been quite reliable in predicting recent Bitcoin price movements. Notably, the levels at around $63,200 and $64,000 are significant targets. However, for this Bitcoin rally to be successful, it needs to surpass the minimum threshold of $70,000 from its local bottom at $49,000.
Bullish Bitcoin bounce
Stepping back to a weekly perspective, it seems that the price of Bitcoin is behaving quite typically. The ups and downs in its value, starting from when the bull flag was formed in March, have mostly remained within the boundaries set by the bull flag.
If Bitcoin’s current downtrend seems to have hit its lowest point in the recent correction, it could indicate a strong upward trend ahead, which is generally considered optimistic or bullish. In an uptrend, when an asset experiences a correction, it often drops close to the 0.618 Fibonacci level before resuming its upward journey. Occasionally, a deeper correction down to the 0.786 Fibonacci may occur. However, when the correction only reaches the 0.382 Fibonacci level, as seems to be the case with Bitcoin’s current price movement, this is often seen as a positive sign, suggesting strong bullish sentiment.
To further clarify, the chart’s lower portion indicates an increase in the Relative Strength Index (RSI). This rise has occurred following a break above the downward-sloping trendline, suggesting that the current outlook for Bitcoin may be improving.
Should the mentioned conflict zones de-escalate and global economic powers achieve stability, the journey for Bitcoin beyond its ‘bull flag’ could potentially be smoother. However, achieving such circumstances is quite challenging.
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2024-10-04 12:03