After closely observing the Bitcoin market for nearly a decade now, I must admit that this current price action has me both excited and cautious. The bull flag breakout is undeniably a positive sign, but as we all know too well in the world of crypto, past performance is not always indicative of future results.
Following nearly seven months of trading horizontally, Bitcoin (BTC) has surpassed the upper boundary of its pennant formation. Does this signify the commencement of the next phase in the bull market, or might it simply be another deceiving move and an unsuccessful surge?
Is this time different for $BTC?
It’s been quite some duration since Bitcoin hit its record high of $73,800. Since then, the cryptocurrency leader has attempted to break out multiple times, only to be turned away each time, plunging back down from its bull flag formation and dashing the optimism of its supporters once more.
Will the current situation repeat itself as it did in previous instances? That largely hinges on Bitcoin’s price behavior on Wednesday. In all past occurrences when Bitcoin surpassed the top of the bull flag, a daily candle was unable to conclude its range above the bull flag trend line. Consequently, Bitcoin needs to close above $66,500 by the end of today’s trading for the pattern not to repeat itself.
Huge Bitcoin ETF inflows
Tuesday saw another significant day of net inflow into U.S. Spot Bitcoin ETFs, adding approximately 5,650 BTC to the funds. This comes on top of the 8,850 BTC inflowed on Monday and 4,210 BTC on Friday. Over the past three days, a total of over 42 times the daily amount of mined Bitcoin has flowed into these ETFs. Could we be approaching a Bitcoin supply shortage?
Bulls carry Bitcoin over the line
In simpler terms, the immediate future of Bitcoin ($BTC) is showing some fluctuations as its price breached the upper trend line of a bull flag pattern. A long shadow dipped below the trend line, reaching the 1.618 Fibonacci level perfectly, before falling back down again. Initially, it seemed like this could be a sign of rejection, but Bitcoin supporters saw things differently and the price has since risen above again. If Bitcoin can maintain its position here and more daily closures occur above this point, it could serve as a stepping stone towards the next peak at $70,000.
A classic bull flag breakout
Today’s chart indicates a typical ‘bull flag’ pattern in Bitcoin’s price movement. The price has breached the trend line, suggesting it might continue to rise. However, there are two hurdles ahead: a horizontal resistance level at approximately $67,000 and a Fibonacci level around $68,600. Overcoming these levels could lead to reaching the previous high of $70,000.
The most bullish indicator for Bitcoin
In simpler terms, the fact that the weekly Stochastic RSI indicators have moved upward might be a highly optimistic sign for Bitcoin. Essentially, the quicker blue line (which typically represents larger price movements) has risen above the slower red line, suggesting that strong momentum could keep driving prices up. If this trend persists until the end of this week, a significant increase in value is likely to follow.
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2024-10-16 12:13