The week started with a small down move in the bitcoin market. Lets see what this means for the short and medium-term future.
Daily chart. In this chart, the $58k top break did not yet cause similar buying that the break of the previous $42k top caused, but instead, the price dropped back below the $58k top level. This alone is not a great sign of weakness, but it is something to get you more open to a possibility of a bigger correction here.
Now we have $52k short-term support close by below the price. If this daily candle retraces all the way back above the $58k top level before closing midnight UTC, then this was only a small Monday dump, and the chart looks very bullish again.
In the 4h chart we can see that the four-hour hl2 RSI is getting close to the 30 level. This has been a good buying opportunity during the rally from <$20k.
Medium-term picture starts to look more bearish if the price drops below the $42k level and then after the bounce won’t get back above the monthly average price as it did after the bottom at $29k.
There is no reason to be bearish until the chart provides good evidence of this. You will not get to sell the exact top like this, but you also will not get chopped out of your hard-earned profits by over-trading.
Even if this is a start of a medium-term correction, I can not see a reason for the longer-term bull market to be in danger. There has not been yet strong enough FOMO buying medium-term. Big money is buying bitcoin, and central banks are printing more fiat to buy it with. We might see scary margin-long squeezes at some point, but these will be short-lived.
In the three-month chart, you can see that the $100k-200k area is getting close, and if we do not rise there too fast, then even that area might not give us any big bear markets yet. The state of the world’s economy needs the ‘wealth storage system’ that bitcoin provides. We just have to wait and see how these fundamentals progress concerning these long-term charts.
Very good!