After seven months of sideways price action, Bitcoin (BTC) is finally breaking out of the top of its bull flag. Is this the start of the next stage of the bull market, or could this be yet another fake-out and a failed rally?
Is this time different for $BTC?
It’s been such a long period of time since Bitcoin reached its all-time high at $73,800. Since that time, the king of the cryptocurrencies has reached the point of breakout several times, and for each one of those times, it has been rejected, to sink back down to the bottom of its bull flag and dash the hopes of the bulls yet again.
Will this time be different? This will very much depend on the price action on Wednesday. In all the other times that $BTC broke through the top of the bull flag, a daily candle was never able to close its body above the bull flag trend line. Therefore, $66,500 is the magic price that $BTC will need to close above by the end of play today.
Huge Bitcoin ETF inflows
Another big net inflow day for the U.S. Spot Bitcoin ETFs certainly helps matters. An additional 5.65K BTC flowed into the ETF coffers on Tuesday, augmenting the 8.85K BTC on Monday, and the 4.21K BTC on Friday. The combined total for these last three days is equivalent to more than 42 times the daily amount of mined BTC. Is a supply crunch on the horizon?
Bulls carry Bitcoin over the line
Source: TradingView
The short term time frame for $BTC shows some volatility as the price crossed above the bull flag upper trend line. A long wick through the trend line touched the 1.618 Fibonacci perfectly before coming back down below. It might have been thought that this was the beginning of a rejection, but Bitcoin bulls thought otherwise, and the price has since crossed back above. If $BTC can hold the line here, and some more daily closes take place above, this can be a launchpad towards the next swing high at $70,000.
A classic bull flag breakout
Source: TradingView
The daily time frame shows a classic breakout of the bull flag. The $BTC price has now confirmed the trend line break, and so it could be onwards and upwards from here. Currently up against a horizontal resistance level at $67,000, the price also has to surmount the 0.786 fibonacci at $68,600, before moving on to that swing high at $70,000.
The most bullish indicator for Bitcoin
Source: TradingView
Nevertheless, probably the most bullish indication for Bitcoin is that the weekly Stochastic RSI indicators have crossed back to the upside. The blue, fast indicator line is now back above the red, slow indicator line. This means that big price momentum can continue to push the price higher. If this indicator can remain as it is at the end of this week, the next big push to the upside is most definitely on.
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.
