Crypto Daily - The Bitcoin price is once more threatening to roll over, having been rejected from a $66,500 local top last week. Enough buying to force the price up is still failing to materialise, and therefore price momentum continues to be generally weak. Does this herald yet another price dump to lower levels for Bitcoin?
Seventh month of sideways price action for $BTC
As Bitcoin enters its seventh month of sideways and downwards price action investors are no doubt feeling the doubt and anxiety common to all those who hold the number one cryptocurrency asset.
However, this is the life of an investor, and as Warren Buffet famously once said:
“(the) market is a device for transferring money from the impatient to the patient.”
If this is the case, it looks as though investors may have to wait even longer for Bitcoin to break its current bonds and head upwards into new price territory.
$BTC ascending channel still intact
In the 12-hour time frame, the $BTC (BTC/USD) price is still within an ascending channel. The top of the channel has been tested several times already, and now the price is bumping along the bottom trend line of the channel.
This kind of pattern would normally break to the downside, so traders will need to be aware of this possibility. That said, if $BTC can bounce from the bottom of this channel, another higher high beyond $66,500 would be the target.
Has the latest reversal hit bottom?
The price action on the weekly time frame is perhaps showing some weakness, although with elements of bullishness. The correction from the local top is still taking place, seen in Monday’s surge to $64,400 which has dipped $2,000 since then.
Nevertheless, last week’s reversal did hit the 0.382 Fibonacci before bouncing back. If this week’s price action is also able to stay above this level it would be bullish, and we could see a following resumption to the upside.
On the other hand, the Stochastic RSI at the bottom of the chart is still causing some concern. The fast indicator line (blue) is rolling over. If this confirms below the slow indicator line (red) at the end of the week, this would signal downside price momentum, and as this is the weekly time frame, this would likely be a strong negative signal.
Liquidity on the way - patience is a virtue
For those investors feeling the doubt and negativity over Bitcoin, especially those from retail, it should be borne in mind that no matter the current price action, a huge amount of liquidity will be entering the system over the next few months from central banks across the world. M2 money supply is increasing as a result, and the premier asset to benefit from all this liquidity is Bitcoin. Patience may well be a virtue.
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.