The crypto world is alight as bitcoin nestles just under its yearly high. Are we about to see a rejection from this point, or are we about to witness a fantastic new price surge that takes bitcoin nearer to its all-time-high?
When bitcoin shot up to $49,000, with much of this momentum on the back of the anticipated Spot Bitcoin ETF approvals, many thought that this would be a ‘sell the news’ event, and that the king of the cryptocurrencies would deflate and make a correction of at least 30%.
However, $BTC had other ideas, and after a relatively mild correction of 21% the price has climbed steeply back again to the point where it is only just under that $49,000 yearly high.
Factors for bitcoin strength
There are probably many factors for such strength, and they would include incredibly weak world economies, where liquidity is starting to flow back into the financial system in order to try and sustain countries such as China, which is staggering along on the brink of collapse.
As this liquidity flows, bitcoin will certainly benefit, and this is to say nothing of individuals and businesses buying $BTC as a hedge against financial system ills, and the diminishing purchasing power of fiat currencies.
To add to this, the Grayscale Spot Bitcoin ETF, which originally experienced huge selling, has seen this selling pressure taper off, and now the rest of the ETFs are attracting heavy daily inflows into bitcoin.
There is always a negative scenario
Source: Coingecko/Trading View
$BTC looks to be in a good place. The resistance at $48,000 also corresponds with the 0.618 fibonacci level, so it is as major as it gets. Always keen to take the negatives as well as the positives into account, there is a chance that $BTC is rejected from here. A double top is also in play.
The bullish case
Source: Coingecko/Trading View
However, zooming in, things do look quite positive. The price is holding above the resistance, which could hopefully now become support. $55,600 is the level of the 1.618 fibonacci.
One last thing to take into consideration is that the weekly stochastic RSI has now crossed upward. This would normally presage a couple of months of bullish price action, leading us nicely into the halving.
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.
