Following the surge to the new all-time high at over $123,000, and the precipitous crash down to below $116,000, the Bitcoin ship has steadied itself and looks as though it may find good support at $118,000. Will this be the base for the next leg higher?
Economic environment not that bad at all
Despite many doomsayers across social media continually forecasting a collapse in the US stock market due to tariff wars, actual wars, and a multitude of other factors, the economic environment for Bitcoin is not that bad at all. The slightly worse than expected Consumer Price Index (CPI) data on Tuesday was balanced out by the much better than expected Producer Price Index (PPI) figures released on Wednesday.
Can the S&P 500 reenter the ascending channel?
Source: TradingView
The U.S. stock market is just point-blank refusing to go down. The planet might be on the brink of the biggest economic upheaval in its history, but Wall Street is not going to succumb just yet.
The proof in the pudding for the S&P 500 is for the price to enter the ascending channel again after a 5-month absence. If on the other hand, the price is rejected from here, a roll over may happen that could trigger a long descent.
However, looking at things from a very basic perspective, government debt refinancing, among other large injections of liquidity, would likely have the effect of forcing up the price of assets, an environment within which the US stock market would continue to benefit.
$BTC finds decent support at $118,000
Source: TradingView
The overbought banana that the $BTC price skidded on, bringing it down below $116,000 has now been cleared up. After the bounce from this local bottom the price looks to have found a decent support level at $118,000, which rests on top of the structure of the previous pennant.
It now remains to be seen whether the price will finish its ascent, allowing the short-term Stochastic RSIs to reach the top, or whether this bullish impulse will be curtailed, permitting the Stochastic RSI indicators to continue to reset lower.
$BTC 2-week chart signals bullish continuation
Source: TradingView
If one needed any encouragement as to the future price direction of Bitcoin, one only has to zoom right out into the 2-week chart. This is a thing of beauty, with each of the continuation patterns pointing to more upside.
The current 2-week candle is only 3 days or so from closing. If it can do this while remaining well above the support band, this would be exceedingly bullish.
Moving down to the first indicator, the Relative Strength Index (RSI) is showing that the indicator line is right up against the downtrend line. It needs to break through and begin the process of trying to invalidate the bearish divergence that stretches back to February 2024.
The bottom indicator – the MACD – has flipped positive. The blue indicator line is back on top and angled upwards, while the first bold green bar is printed on the histogram below.
No major price correction over the next 3 days = bullish continuation of Bitcoin’s rise.
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.
