After around 5 days of upwards price action which added nearly $4000 to the bitcoin price, the market has cooled down somewhat after being rejected from the $24,000 level.
The technicals for bitcoin
Having pierced the 200 weekly moving average bitcoin’s job now is to close the next weekly candle above. There wasn’t enough buying strength in the market to break the $24,000 resistance and bitcoin duly rolled over, consolidating at around $23,300, on Monday at time of writing.
The next strong area of support is at $22,500. This is below the 200 weekly moving average, but it could be feasible for bitcoin to return to support, resetting the shorter term RSIs, and then having another go at the $24,000 resistance.
There is no Federal Reserve FOMC meeting in August, so perhaps the coast is clear for bitcoin to rise, given that there will be no more potential rate hikes until September. Also after the last FOMC meeting, Fed chairman Powell was far more dovish on the prospect of easing off on the rate hikes, inflation figures allowing of course.
Looking upwards in the chart, $29,000 is the absolutely massive resistance to be overcome. Ever since December 2020, when bitcoin first passed this price level, it has come back to retest several times, and then eventually fell through in June this year.
Technically speaking, it wouldn’t be such a good idea for the king of the cryptocurrencies to break through this resistance in the next month or so, given that bitcoin needs to form some decent market structure first.
Therefore, it’s more likely that bitcoin would get rejected if it did get as far as the $29,000 resistance, and would potentially come back once again and test $20,000.
Bitcoin the best play as fiat dies
Long term bitcoin is still looking an extremely promising play, and arguably the best asset to hold over the next few years, as fiat currencies accelerate their death spirals.
It looks likely that central banks will make their last throw of the dice in the form of CBDCs (central bank digital currencies), but other than China, the major powers do not appear to be in a position to launch their CBDCs within the next couple of years, and fiat currency and the global monetary system will potentially have reached breaking point by then.
Gold and silver also look to be good assets to put one's wealth into, but given the ease with which the banks can just print money out of thin air and then dump on the paper futures markets, thereby suppressing the price (which has been going on for many years) is something to think about.
Bitcoin also suffers from price suppression. Gensler, chairman of the SEC, made the decision to allow a bitcoin futures ETF rather than a spot ETF, and therefore made sure that the price could only be shorted.
However, the king has no clothes on, and it can surely only be a matter of time before something breaks in the monetary system and it is exposed for what it is. When that system goes down, the savvy investor needs to be in an asset that is outside of it. Bitcoin is that asset.
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.