Bitcoin (BTC) may be undergoing a small correctional phase, but its recent breakout of a 7-month bull flag has so far been successful. The $BTC price is holding above the top trendline of the bull flag, and once the current correction is complete a bounce could be forthcoming.
ETFs, war, and global liquidity
FOMO (fear of missing out) could be taking place among the institutions as the buying frenzy for the Spot Bitcoin ETFs continues apace. Yet another big net inflow day for the ETFs resulted with 4.31K BTC $297.6m being bought out of a dwindling market supply. The Blackrock ETF (IBIT) accounted for practically all of Monday’s buying.
Be that as it may, the ongoing global conflicts are still having their effect on markets. Israel is still to potentially launch an attack on Iran as ceasefire talks do not appear to be bearing any fruit. Add to this the approaching date for the U.S. presidential elections, and one has a highly volatile cocktail that can cause huge upside, as well as downside movements.
As things stand, the markets are still riding high, as global liquidity injections are either entering the market, or are planned to be made in the next few weeks and months. The S&P 500 continues to make all-time highs at a frequency of every few days, and the tech-heavy Nasdaq, which normally outperforms the S&P 500, is almost back to its own all-time highs.
Can $BTC stay above its bull flag?
In this kind of environment Bitcoin (BTC/USD) should be shining. That said, so far the king of the cryptocurrencies has been lagging both gold, and the stock markets. $BTC has broken out of its bull flag, but can it stay above?
Source: TradingView
The short term time frame shows the current correction for $BTC. A dip to confirm the bull flag trendline was bought up very quickly, and the price did appear to be holding the 50 SMA (blue line). However, in the last couple of hours a 4-hour candle is heading down to the convergence of the bull flag trendline and the horizontal support from the previous local high.
A bounce would be a strong favourite from this support, given that all the short term Stochastic RSIs have bottomed. They should probably turn back up during the course of Tuesday, bringing upside momentum into the $BTC price.
$BTC to consolidate and climb higher
Source: TradingView
The daily chart clearly displays the breakout of the bull flag, and how the latest corrective phase has touched the top of the bull flag in order to confirm the breakout. As long as no shocks come into the market over the rest of this week, it might be expected that the $BTC price consolidates and eventually starts climbing away from the bull flag.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
