Macro indicators are suggesting that Bitcoin ($BTC) is either close to, or has found the bottom for this long correction, as it approaches six months of sideways and downwards price action.
A game of patience
For those crypto investors who are new to the world of Bitcoin, the last few months must have been trying in the extreme. Many would perhaps have sold their $BTC position, especially if they had jumped onboard when Bitcoin was near its top of nearly $74,000.
Probably what the majority of these investors don’t realise, is that even in traditional stock market trading, it’s a game of patience. In fact, the crypto market is far more volatile than the stock market, and so big moves happen a lot quicker. Six months is quite a short period of time in the world of investing.
That said, it is starting to look like Bitcoin could be at or near the bottom of this long, drawn-out correction, in spite of the reports across social media that this or that huge entity might be selling.
Sellers and buyers
It is true that for the Spot Bitcoin ETFs, the selling is certainly ongoing. Friday saw the eighth straight day of net outflows from the ETFs, and it was another big sale of 3.03K $BTC that institutions or private investors divested themselves of.
However, this has to be measured against the likes of Michael Saylor’s Microstrategy looking to buy again, and the mystery buyer ‘Mr 100’, possibly a sovereign wealth fund, who continues to buy Bitcoin in quantities of around 100 $BTC at a time. He bought 2000 $BTC in just the first seven days of September.
$BTC in short term descending channel
Source: TradingView
Looking at the short time frame chart for $BTC, it can be seen that the price is moving within a descending channel. While this chart pattern is bearish in itself, given that it is displaying an uninterrupted sequence of lower highs and lower lows, a breakout to the upside is more likely to indicate a change in trend.
As the $BTC price moves back to the top of the channel, a rejection is quite possible again, causing yet another lower high, and given that support at $51,000 is not far below, the price could come down one more time.
Macro indicators suggest a coming trend change
Source: TradingView
Moving out to the macro weekly time frame, it can be seen that the bull flag is still holding perfectly. A wick down to test the $51,000 support level has taken place, and it would therefore just appear to be a matter of time before the $BTC price either moves back to the top of the flag, or falls through the bottom.
At the bottom of the above weekly chart, the Relative Strength Index is displaying a series of lower highs and lows. However, the orange line marks important support and resistance, going back quite a number of years. If this support can hold, and a bounce takes place, a break of the descending trend line could augur the beginning of a trend change.
Source: TradingView
Looking at the same chart, but with the Stochastic RSI at the bottom, it can be observed that the indicator lines are bottoming again. This means that in the next week or two, these indicator lines could be on their way back up. Two fake outs have occurred thus far, so third time lucky could see strong momentum carry the $BTC price into a marked upward trend.
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.
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