Bitcoin (BTC) hit a new all-time high of $124,000 early on Thursday. Following the high, the price retraced to just above $121,000. While the crypto market is very bullish, buyers are starting to lose steam. Could buyer exhaustion bring the price further down?
Excitement continues to grow
The good news for crypto just keeps on coming, at least in the US, which is the main market for alternative assets. Only just last week, President Trump signed an executive order allowing Americans to invest their 401(k) retirement savings accounts into crypto. Looking into the future, this move alone could open the door to some of the more than $12 trillion that is invested into these plans.
With Bitcoin just having hit a new all-time high it might be expected that this surge continues. Excitement is growing by the day and the US stock exchanges are riding high, making their own all-time highs with mounting regularity.
A note of caution
However, Bitcoin is just on the edge of the overbought zone. Therefore, two possible scenarios could play out. Firstly, the market could continue to climb higher, but eventually reach a point where buyer exhaustion causes a precipitous plunge back to earth. The other potential scenario is that the Bitcoin price starts to track sideways again until the momentum indicators for the shorter term time frames have reset.
This is still a bull market
One thing to bear in mind is that this is a bull market, and it is entering what could be its final stage. The trend is up, and is likely to remain so. There will probably be more corrections to come, but in the main, this market is likely to go higher.
$BTC in healthy trend higher
Source: TradingView
The short-term time frame shows that since leaving the bull flag the $BTC price has continued higher, but in a very healthy ebb and flow manner, without surging madly.
After making the all-time high, the price has come back to test the tops of the candles from the last upward impulse. The Fibonacci levels for this entire bull flag move reveal that the price is now beyond the 0.786 level. The 1.618 extension level is overhead, pretty much exactly at $130,000.
Finally, the ascending trendline (faint dotted line) is still being respected. So until it’s not, this particular upside impulse is probably set to continue.
$BTC continuation of this upside move?
Source: TradingView
The daily time frame illustrates the trend break in the RSI. The indicator line broke up through the descending trendline and this was reflected in the bull flag breakout in the price action.
Now this recent upward trend (faint dotted line) has reached the point where it will either continue, or it will break down. A bounce of the indicator line from this ascending trendline would signal a continuation of the upside move.
$BTC price follows bull market parabolic curve
Source: TradingView
Zoomed right out on the weekly time frame, the entirety of this bull run plus the climatic stage of the previous one can be viewed. The Fibonacci extension levels indicate that the 1.618 Fibonacci level was reached at just over $100,000, while the 2.618 level is overhead at a price of almost $155,000 – a very possible target.
It can be seen that the price action is still keeping to the parabolic curve, meaning that the price is likely to continue to rise steeply. At the bottom of the chart, the Hash Ribbons indicator has printed a row of 3 back-to-back blue buy signals. Such a tight group of 3 buy signals has never printed before on the weekly time frame. It can only be imagined what could happen to the price from here.
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.
