Bitcoin is suffering yet another red candle week. Currently sitting on the support of $63,000, bitcoin could break down further. In addition, looking at the big macro picture, the future is anything but certain.
Shouldn’t the bitcoin price go up?
The halving has now taken place, and other than a possible post halving dump, the $BTC price should now be going up, as the king of the cryptocurrencies moves into the final parabolic stage of its bull market. Isn’t this a foregone conclusion?
As Shakespeare said “there is many a slip twixt cup and lip”, meaning that the cup is heading for the lip, but all kinds of things could happen before (and if) it reaches it.
In this case, it would be really difficult to imagine that there won’t be a continuation of the bitcoin bull run once this uncertain period of sideways and downward price action has played out.
Monthly stochastic RSI crosses down
Source: Coingecko/TradingView
That said, zooming right out into the very high time frame of the monthly, it can be seen that a rather large obstacle to price appreciation has just appeared on the scene. This comes in the form of the monthly stochastic RSI, where the blue (fast) line has just crossed over the red (slow) line, indicating that a huge amount of momentum could be about to descend on the bitcoin price, forcing it downward.
This downward momentum hasn’t arrived yet, and may not even hit for a while. For the indicator to officially signal the downward momentum, both fast and slow lines need to dip below the 80 level (upper dashed white line), and it can be seen that this is still some way off from happening.
However, just as Shakespeare intimated, there are no certainties. Just like a super tanker that needs to change course, the stochastic RSI could change direction before dipping below the 80 level, and thereby completely change the direction of the momentum back to the upside.
By keeping an eye on the weekly stochastic RSI, a good idea of where the momentum is going can be ascertained. Here, on the weekly, the fast line has just dipped below the 20 level, indicating that within the next week or so, the weekly stochastic RSI indicator should cross back to the upside. This would potentially be enough to help swing the monthly back to the upside as well. The next two or three weeks should reveal a clearer picture.
Strong support at $61,000
Momentum aside, the $BTC price has strong monthly support at the $61,000 level. The price has already bounced from this support in each of the last two weeks and was bought up strongly both times. A critical juncture is coming, as this support will either hold, and the price will bounce upward again, or it will not, and the price could suffer a much deeper correction.
Do your homework
When all is said and done, some of the investors who buy $BTC probably do so in an effort to prevent their wealth from being debased by way of the fiat currency they hold in the bank. The question should be whether holding currency in the bank is a better option than buying $BTC?
For all those who are uncertain in this respect, doing one’s homework on bitcoin, and what it means for freedom of transactions, protection of wealth, and a hedge against bank failures, is of the utmost importance.
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.
