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Just when you thought it was safe to go long … Does a bounce come here? Crucial weekly close could be bullishBitcoin continues to surprise to the downside. The $BTC price lost more than $6,000 in the space of 48 hours, after being rejected from $65,000. The high volatility triggered more than $300 million in liquidations across the crypto market, mostly on long positions.
Just when you thought it was safe to go long …
Just when you thought it was safe to go long, with macro indicators generally pointing to the upside, the $BTC price dumped sharply once again, lopping 9.6% off of the price in the space of only 48 hours. It may not have helped that the Spot Bitcoin ETFs experienced a 2k Bitcoin outflow on Tuesday, which interrupted a previous 8 straight days of inflows.
Does a bounce come here?
Source: TradingView
The short term chart shows that the $BTC price dropped through the upward trend line on Tuesday, and then plummeted like a stone to touch the very important horizontal support at $58,000. The decision to be made now is whether this is where a bounce takes place, or if the price continues to plummet down to the 0.618 fibonacci at $55,000.
Crucial weekly close could be bullish
Source: TradingView
Zooming right out into the weekly time frame shows that the major support level at $58,000 is holding firm. This level was also important support and resistance during the last 2021/2022 bull market. Therefore it might be expected that a bounce takes place from here.
The short term Stochastic RSIs are all currently bottoming, and will provide upside momentum for the $BTC price soon. The weekly Stochastic RSI, as seen on the chart above, is still projecting a cross up, while the Relative Strength Index (RSI), at the bottom of the chart, is currently giving cause for concern, given that the indicator line is showing a rejection from the downtrend.
That said, the weekly close on Sunday will provide a major clue as to whether these indicators end in a bullish or bearish signal. If the bounce from the $58,000 horizontal level is successful, this signal is more likely to be bullish.
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.
