Bitcoin (BTC) Price Reversal, but Long-Term Upside Momentum Returning

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Over a shorter period, Bitcoin appears to be overextended, suggesting potential price correction. On the other hand, longer-term analysis indicates a possible resurgence of bullish trends.

Stochastic RSI – short-term signals

The Stochastic Relative Strength Index (RSI) is a tool used to identify trends in pricing, signaling when a market may be overbought or oversold. By examining the Stochastic RSI across four different time frames – 4 hours, 8 hours, 12 hours, and one day – we see that all indicators are currently at their peaks. This suggests that each of these markets might experience a decrease in price over the next few days, resulting in a potential price dip.

Keep in mind that occasionally, the Stochastic RSI lines may linger close to their highest points for a prolonged stretch before dropping again.

Huge BTC buy for U.S. Spot Bitcoin ETFs

In addition to the technical indicators used in Bitcoin trading, a significant shift occurred last Friday in actual buying and selling activity. This was evidenced by U.S. Spot Bitcoin ETFs recording their fifth largest net inflow with 9,360 BTC, or approximately $907.30 million, being purchased. If these levels of investment continue, it could potentially drive prices up to, and possibly beyond, the previous all-time high of 108,000.

Price boost into Trump inauguration 

As a researcher, I am eagerly anticipating the upcoming two weeks, as they mark Donald Trump’s inauguration as the next President of the United States. The potential positive atmosphere this could create for cryptocurrencies should not be overlooked. If a short-term price dip were to occur for Bitcoin, it might just be that the subsequent price surge happens in conjunction with the inauguration event, providing an additional boost.

BTC price continues to respect ascending trendline

Over the past few months, Bitcoin’s day-to-day graph indicates a pattern of sideways movement. Interestingly, the price seems to maintain itself above the uptrend line that started in 2021. If there’s a break and subsequent confirmation beneath this trendline, it would warrant some level of worry.

By examining Fibonacci retracement levels, it appears the price has recently hit the 0.5 Fib level and also formed a minor peak in its short-term progression. With the Stochastic RSI nearing its maximum, there could be a potential drop in price from this point. However, if we consider where the price initially broke above the upward trendline, the Stochastic RSI was actually falling at that time. This suggests that on lower time frames, this indicator might not be as dependable.

Weekly RSI shaping to cross back up

On a weekly basis, the most intriguing movement in the Stochastic RSI becomes apparent. At the chart’s base, you can observe that the fast blue line is inclining upward, possibly having found support at the 0.50 midpoint of the indicator. If this trend continues and the fast line crosses above the slow orange line, which might occur towards the end of this week, it could signal a renewed surge in momentum for the BTC price, driving it higher.

Huge price momentum coming from monthly Stochastic RSI

Examining the monthly graph, it’s clear that the Stochastic RSI doesn’t show any misleading signals at present. The indicator lines are moving upward and once they both surpass the 0.80 mark, the momentum will reach its peak. As the blue line has already crossed, it’s likely that the orange line will cross next week as well. This could be the time for the final powerful phase of this bull market to unfold.

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2025-01-06 14:09