After a period of generally sideways movement since mid-November, the Bitcoin price is about to breakout. Will $BTC break up to new highs, or are bears about to break the uptrend with a sharp move to the downside?
As Bitcoin reaches its next directional decision, both bulls and bears are making their cases. Market sentiment has been sliding over the last couple of weeks, while the U.S. Spot Bitcoin ETFs have continued to register net outflows. In contrast, MicroStrategy may well announce another Bitcoin purchase on Monday.
Market sentiment on the slide
Source: Alternative.me
The Fear & Greed Index, which graphically shows market sentiment for crypto, has also been on the slide. From last month’s Extreme Greed reading of 84, there has been a slow reduction in sentiment, resulting in today’s reading of 65. This is still in the greed, but it can be seen in the graphic above that this positive sentiment could change if crypto prices continue their reversal.
Another net outflow day for U.S. Spot Bitcoin ETFs
The U.S. Spot Bitcoin ETFs recorded another net outflow day on Friday. The 3.1K outflow was only ameliorated by Blackrock’s IBIT ETF, which continues to buy, with only very seldom days of selling.
MicroStrategy purchase announcement on Monday?
One potential positive for the bulls is the fact that MicroStrategy has announced a BTC purchase every Monday since 11 November. With a massive amount of buying still to come, it would be a surprise if MicroStrategy did not make an announcement later today.
$BTC breakout is nigh
Source: TradingView
The 4-hour chart for $BTC shows how near the breakout is. The Stochastic RSI at the bottom of the chart is displaying a cross up of the two indicator lines, signalling short-term price momentum is potentially to the upside. This momentum would likely increase if the indicator lines cross above the 20.00 level.
The 8-hour, 12-hour, and 1-day Stochastic RSIs are also either at, or nearly at the bottom, signalling that momentum could buoy $BTC higher, at least for the short to medium term.
If the price breaks to the downside, there is support below at $90,000. If the bears managed to force the price lower than this, the next big support level is all the way down at $73,000.
Three conditions to be met for continuation of bull market
Source: TradingView
The weekly chart shows that $BTC is still above the ascending trendline that stretches all the way back to 2021. While this is the case, the bullish trend is likely to continue.
Further down the chart, it can be seen that the Stochastic RSI is coming down rapidly. It will be the job of the Bitcoin bulls to not let the price crash before the indicator lines can start to turn back up again.
At the bottom of the chart, the Relative Strength Indicator, which signals overbought/oversold conditions, needs to turn back up, which it may be shaping to do, and then eventually rise to pierce through the descending trendline and hold above.
If all three of the above conditions are met, the next stage of the bull market could contain some fireworks. However, this still remains to be seen.
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.
