As a seasoned researcher with over a decade of experience in financial markets, I have seen my fair share of market volatility and recovery phases. Bitcoin’s recent 13% surge after hitting a local bottom at $53,600 may be viewed by some as just a relief rally or even a bear market bounce. However, based on my analysis and observations, I believe this recovery is more than just a temporary blip.
Following Bitcoin‘s 13% price increase over the past few days, some might consider this a mere relief rally. However, it could also be seen as the market returning to normal after a downturn. Bitcoin’s recovery is now gaining momentum, and potential higher prices may await us in the future.
Bitcoin simply just overbought
As an analyst, I’ve been closely monitoring Bitcoin’s price movements, and the trends suggest that we may have reached a turning point. The recent low of $53,600 might have marked the definitive bottom. Selling pressure appears to be waning, even if Bitcoin dipped 2.4% on Tuesday. This small decline is a normal correction following a significant 20% recovery from the local bottom.
As a crypto investor, I believe some analysts are placing blame on the transfer of significant Bitcoin amounts between Mt. Gox wallets for the recent market downturn. However, it’s essential to remember that this news isn’t new to the market. The primary reason for the pull-back, in my opinion, is that Bitcoin had become overbought – a common occurrence in volatile markets.
Can $63,000 become support?
On the 12-hour chart for Bitcoin ($BTC), we notice a pleasant formation with the price resting comfortably above the $63,000 mark. However, it remains uncertain if this level will endure as a solid foundation, potentially transforming into support in the process.
On Tuesday, every brief-term Relative Strength Index (RSI) for stochastic data showed peaks, signaling imminent reversal of momentum and resulting in the subsequent decline on Wednesday. A bull flag formation in Bitcoin’s ($BTC) price chart might emerge during this phase, potentially pushing it back up to the $71,000 mark at the range’s pinnacle. The short-term momentum indicators may require additional time to readjust, but this period could see a temporary bullish trend.
Two massively bullish signs for Bitcoin
Looking at the bigger picture on a weekly basis, it’s clear that Bitcoin (BTC) needs to hold the $63,000 mark as a crucial support level. A dip down to revisit $61,000 isn’t catastrophic, however.
Two strong indicators of optimism on a larger scale are the substantial bull flag formation and the possibility of the stochastic RSI surpassing the 20-threshold. If the stochastic RSI generates enough momentum and the price manages to exceed the bull flag, a more cautious projection of $89,000 could become a reality.
Should the bull flag formation in Bitcoin’s price chart be broken above its prior support at $25,000, a potential increase to around $102,000 can be anticipated based on technical analysis. However, it is essential to note that higher prices are still a strong possibility for Bitcoin beyond this measure. Keep an eye on the market developments.
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2024-07-16 14:07