Bitcoin (BTC) broke out of a sideways holding pattern on Sunday and continued its surge into Monday. From just under $118,000 the price put on a spurt and achieved a new all-time high of $122,550 on Monday morning. Is the alpha currency running out of steam now, or could there be a lot more upside to come?
Extreme greed approaching
The market appears to be licking its lips rather than becoming nervous at this particular stage of Bitcoin’s ascent. The Fear and Greed Index is at a score of 74, which is still in the Greed segment. However, at Bitcoin’s current rate of climb, a move into Extreme Greed may not be far off.
Huge inflows into Bitcoin ETFs and treasuries
On the buying side of things the indications look very strong. The U.S. Spot Bitcoin ETFs bought big over the last couple of trading days last week. A total of 19.45K BTC were bought on Thursday and Friday alone.
Thursday’s purchase of 10.57K BTC was the second biggest on record, while Friday’s inflow of 8.88K BTC was the fifth biggest.
As usual, Blackrock’s IBIT ETF bought the lion’s share of these inflows. The company now holds a total of just over 706,000 BTC, putting it well ahead of Fidelity’s ETF (FBTC) which holds a little more than 200K BTC.
Among the other usual buyers, Metaplanet announced that it had bought 797 BTC for $94 million. Michael Saylor’s Strategy is likely to announce a purchase later on Monday.
US CPI data release a potential banana skin?
Regarding a possible banana skin for Bitcoin, one only has to look at the upcoming CPI data for the US, which will be published on Tuesday. CPI m/m is forecast to be 0.3%, compared with the last figure of 0.1%, while Core CPI is also expected to grow to 0.3 m/m from its previous monthly reading of 0.1%. If these figures are the ones published, a potential dip in the stock market would likely knock on to the crypto market.
$BTC continues surge: now over $123,000
Source: TradingView
The very short-term 1-hour price chart shows that $BTC has just surged higher again. This time the price stopped just short of $123,200. It remains to be seen if the bulls are now pausing to build some price structure, such as another flag, before pushing the price higher again.
$14,000 added to $BTC price since bull flag breakout
Source: TradingView
The above 4-hour chart reveals the current $BTC surge in all its glory thus far. After breaking out of an 8-week bull flag, the price kept to the upper trendline for a while and then began its current surge. So far, around $14,000 has been added to the price of Bitcoin, and while it can be argued that this may still be small beer compared to a potential move to over $200,000, there will probably be a more extensive correction at some point. Tuesday’s US CPI data release has the potential to apply the brakes.
Bearish divergence invalidated on daily
Source: TradingView
On the daily chart it must be noted that at least on this time frame, bearish divergence has been invalidated, as the indicator line on the RSI has now risen above the last high, which was recorded at the top of the bull flag.
$BTC to $137,000 and beyond?
Source: TradingView
That said, on the weekly time frame, which has far more importance, the bearish divergence is still very much in evidence, as the price continues to climb and the trend on the RSI goes in the opposite direction. However, the indicator line is just in the process of crossing above the descending trendline, so in time, bearish divergence can be annulled on this time frame as well.
While there may be the odd pause and retracement here and there, the $BTC price still looks set to rise beyond $130,000. If the measured move for the small bull flag plays out, this could take the price to $137,000. A lot of indicators are suggesting that Bitcoin is still nowhere near the top of its bull market yet. The next few months are bound to provide plenty of frills and spills. Paying closer and closer attention as the price rises would be a good strategy to follow.
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.
