Greetings! In this article, I will go over my technical analysis I did today and explain what indicators notable and future potential scenarios of the BTC price action were.
Bitcoin Reaching its Limit?
During the past few months, Bitcoin has exploded in price. This, however, was nothing very surprising, as the probability of ETFs being approved were extremely high, which is what led Bitcoin to have an explosive price movement. Despite this, currently, Bitcoin is reaching potentially its temporary limit due to rallying so much within the past few days.
Technical Analysis:
In the four-hour time frame, there aren't much important indicators. In terms of the RSI, it retreated back into high neutral territories and the MACD is beginning to form a bullish cross. Furthermore, in the four hour time frame, a miniature wedge is forming within the 59k-64k range. Due to the wedge and the potential bullish cross on the MACD, it is probable that Bitcoin will rally slightly more within the next few days to perhaps the 64k-65k range.
However, I believe that this miniature rally towards the 64-65k range will be short lived due to the indicators showed on the daily timeframe. The RSI in the daily time frame looks extremely bearish, with it already spiking to 90 RSI (Which historically, is the turning point for a Bitcoin rally to turn bearish). This means that in order to break this historical record, Bitcoin needs a large catalyst in order to grow even further in these unhealthy conditions. However, without a catalyst as large as ETF approvals or the Bitcoin halving, it seems that Bitcoin will once again follow this historical trend. This is further backed by the MACD because along with the MACD's oscillation curves being nearly at Bitcoin's historical highs, the MACD is also printing lighter & smaller green bars, which indicates a loss of bullish momentum. Due to all these indicators combined, it is likely that within the next few weeks, Bitcoin is likely to retrace slightly (If a catalyst doesn't appear) towards the 55-50k regional support.
Conclusion:
In conclusion, while long term wise Bitcoin still is looking bullish (Both fundamentally & technically), it is likely that Bitcoin will need the much-needed retracement in order to regain some rallying strength. However, that being said, due to the unpredictability of ETF approvals, there is a possibility where Bitcoin could keep rallying (Despite flashing severely overbought indicators). Regardless, it is evident that eventually, Bitcoin would run out of rallying catalysts and would need to take a "break" (AKA Retracement).
