Bitcoin (BTC) battles resistance – up or down from here?

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As a seasoned crypto investor with battle-scars from numerous market cycles, I’ve learned to never underestimate Bitcoin’s resilience and its knack for surprising us. The current price action of BTC is reminiscent of a phoenix rising from the ashes, defying expectations after last weekend’s sell-off.

It seems that Bitcoin (BTC) has managed to overcome the intense selling over the weekend into Monday, and it’s now on a price recovery path. At the moment, it’s facing significant resistance near $57,000. The question is whether it can breach the substantial resistance at $61,000 next.

Bulls take back control

In simpler terms, after a steep drop over the weekend due to hedge funds liquidating their Bitcoin and crypto holdings as part of their yen carry trades, Bitcoin has bounced back strongly. This recovery is not shy or uncertain.

Starting from its low of $49,000, Bitcoin ($BTC) has surged by approximately 16.5%. This surge suggests a potential ‘V-shaped’ recovery for the cryptocurrency. Currently trading above $57,000, Bitcoin is putting up a strong fight against resistance at this price point.

Possible $BTC rejection?

Focusing on the immediate future, it’s clear that the Bitcoin price has reached a significant level. Not only is it encountering a flat resistance point, but it’s also coming up against a descending trendline that originated from the previous high at $70,000.

On this given timeframe, the randomized Relative Strength Index (RSI) seems to indicate another potential peak. This suggests a higher probability for the price to be rejected, possibly leading to another downturn. If this happens, the decline might extend as far as $52,000.

Potentially bullish weekly candle close

Conversely, over a longer weekly perspective, it’s quite evident that Bitcoin has made a comeback. This is underscored by the fact that the lower parts of most of the ‘bull flag’ candles are dominated by long wicks, indicating that when the Bitcoin price drops, there’s strong buying activity.

The ongoing drop in the current wick has been the longest yet. However, it’s crucial to remember that we need to wait for the weekly closing before confirming its continuation. If Bitcoin’s price ends up around this level, a hammer or even a dragonfly doji candle could indicate a very optimistic outlook for future price movements.

In summary, the reversal in the stochastic RSI, triggered by intense selling over the past week and through the weekend, is a concern. To confirm this trend change, we’ll have to observe the weekly closing price. If the indicator bounces back towards its lowest levels, it may subsequently cause an upward cross, restoring momentum under the Bitcoin (BTC) price, potentially pushing it higher.

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2024-08-08 13:06