As a researcher with several years of experience in the cryptocurrency market, I’ve seen my fair share of false breakouts and consolidation periods. Based on the current situation with Bitcoin, it’s still too early to tell whether this latest breakout is genuine or just another fakeout.
As an analyst, I’ve noticed that Bitcoin broke through the boundaries of its bull flag formation on Wednesday. However, contrary to expectations, the price did not experience a significant surge immediately afterward. At this point, it’s essential to consider whether this is merely a brief period of consolidation before continuing the upward trend or if it could be another false breakout.
Not cut and dried yet
For the past three days this week, Bitcoin has shown robust growth, with its value surging over 5%. This upward trend has broken through the previous bullish flag’s peak for the first time following four attempts, leaving it resting comfortably above that level as of Thursday.
Though the situation isn’t completely resolved, some key conditions must be met for Bitcoin (BTC) to advance further. A daily close above the bull flag’s peak is essential, and ideally, several more daily closes above would strengthen the bullish case. Overcoming resistance at $71,300 is also necessary, as only then can BTC attempt to challenge its all-time high of $73,700.
Tug of war for rest of this week?
As a crypto investor, I’ve noticed that Bitcoin seems poised for success this go-around despite some short-term turbulence. The stochastic RSI indicator is showing momentum shifting to the downside, but this trend is being challenged by strong buying pressure from Spot Bitcoin ETFs. This back-and-forth struggle could persist throughout the week, allowing the 4-hour and 8-hour RSIs to decline and reset.
Retest of support?
In the near future, the Bitcoin price might retrace and move back within its bull flag pattern. This could potentially pull the price down to the $69,000 support level, which aligns with the existing uptrend line.
Despite my previous remarks, if Bitcoin ($BTC) dips to revisit its support level, the significant purchasing power of Spot Bitcoin ETFs is expected to persist. Once the price breaks through both the flag and resistance levels, we may witness another robust bull market rally.
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2024-06-06 13:38