Bitcoin rallied a bit on Thursday, rallying up to the $58K level to recover most of yesterday's losses, finishing the trading session near the highs. This is a bullish turnaround as the bulls continue to buy any Bitcoin dip as we may be looking at another higher low before going into the weekend.
(April 8, 2021 10:30PM EST)
Bitcoin continues to gyrate in an increasingly narrow but ascending range. What was a $10K - $15K range now seems to be funneling into a shallower $5K range, pointing to another micro consolidation pattern. As you can see in the chart above, Bitcoin could be forming another ascending wedge pattern based on its retest of resistance at $60K and higher lows since the end of March. If Bitcoin respects the trendline, we could see another test of $60K resistance this weekend. If Bitcoin breaks above $60K with an impulsive candle and clears $62K, that should open the floodgates to $65K and $70K in relatively short order. Given Bitcoin's mid-five-figure price now, multiple-thousand dollar intraday price swings are the norm. By that measure, $65K or even $70K might be too conservative to be considered a "rally."
Bitcoin's RSI is relatively low for a bull market at 58, indicating a "cool off" period of Bitcoin as it has been consolidating in this $10K range between $50K - $60K since January when it initially rallied up to $58K. This alludes to market sentiment's bullishness damping significantly since January when Bitcoin smashed to new records and posted a 90+ RSI for weeks.
As you can see in the chart above, Bitcoin's year has consisted of rallies up and smaller corrections which are buying opportunities. If the past is an indication of what's likely to happen again, then the dip opportunity was a week ago and now Bitcoin should see an explosive green candle above $60K any day now.
It's easy to look at the daily candles oscillating back and forth in seemingly up and down patterns, or the volatile newsflow screaming "BUY" one moment and "Bitcoin's dead!" the next. But when you zoom out and look at our long-term compass, Plan B's Bitcoin Stock to Flow X Model, you can see Bitcoin's only moderate progress in the grand scheme of this macro bull cycle. In fact, not only could we very likely see a $100K+ Bitcoin by EOY 2021, we could see a $300K+ Bitcoin in 2022.
Support: Immediate tentative support at $55K, 50 Day EMA at$50K.
Resistance: $60K, $65K, $70K, then $10K intervals up to $100K.