After the excitement of the down, then up days, on Tuesday, and Wednesday respectively, $BTC is tracking sideways, having found support at $65,000. Will the main direction from here be up, or down?
With outflows surpassing inflows for the Spot Bitcoin ETFs over the first few days of this week, it’s probably really not surprising that the bitcoin price has somewhat stalled. What was surprising, was how well that retail filled the gap, and bought $BTC up without the aid of Blackrock et al.
Bitcoin sentiment is muted
However, there does seem to be a more muted sentiment across the crypto market currently. The Fear and Greed indicator is still in Greed territory, but at a value of 75, it has backed down from the Extreme Greed of last week of 83.
Bitcoin profit-taking going into halving
J P Morgan analysts were quoted in a Bloomberg article as highlighting how bitcoin was overbought, and likely to see a retrace going into the halving event. They also pointed to the weak Spot Bitcoin ETF inflows as another reason for a possible reversal.
The same analysts were of the opinion that the bitcoin price could go as low as $42,000, stating that the belief that Bitcoin ETF flows would be one-way only, was probably erroneous, and that profit-taking would likely take place around the halving.
Bitcoin bullish in short term
Source: Coingecko/Trading View
Viewing the bitcoin price on the daily time frame it can be observed that the price has formed a bull flag, which is obviously a very bullish pattern. The price did leave the flag to the upside on Wednesday, but came back in on Thursday. Friday sees the price having tested the top of the bull flag, as well as the support at $65,000. This could be the start of a breakout.
Storm clouds gathering on higher time frame
Source: Coingecko/Trading View
Although the short term outlook for $BTC might be bullish, zooming out into the weekly time frame, things do look concerning. While the bitcoin price has been trending up, the stochastic RSI indicators have crossed down. This is an indication that momentum is now falling, and that bearish divergence is coming into play. If the drop does take place, $43,000 could be a good level of support - similar to the $42,000 level suggested by J P Morgan analysts.
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.
