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Another weekly close above $30,000 means bitcoin is still primed to break through the all-important $31,000 resistance.
Bitcoin has more in the tank
Another week passes and bitcoin is still at the locked gate that provides a potential quick passage to $36,000 and beyond. This is the second major attempt at this resistance, and with more in the tank this time, bitcoin could do the business.
“More in the tank” points to the fact that momentum is on bitcoin’s side this time. When the king of the cryptocurrencies last came up against the $31,000 barrier it was on the back of a surge from $20,000, and all the momentum had evaporated by the time it reached the most important level.
Momentum indicators move higher
Currently bitcoin is at resistance and is moving sideways before potentially breaking through. On the longer time frame of the weekly, the Stochastic RSI (momentum indicator) is getting to around half way up, and heading higher - an extremely bullish signal.
Going into lower time frames, both the 8-hour and 12-hour have bottomed and are heading higher, and the daily time frame is now on the way down.
Back in April when bitcoin was at these levels all these time frames were at the overbought level and of course, with bitcoin having arrived at resistance in exhaustion, there was only one way to go and that was back down.
Another reason for optimism is that bitcoin has broken through the top of the bull flag it has formed since that last April rejection. Granted, it hasn’t shot out of the top and headed higher straight away. Instead, it has followed a process of going back inside the flag and then just sideways action now that it has emerged again.
Is bitcoin such a risk asset?
Perhaps bitcoin is just waiting for that particular bullish news that will break the inertia and send it rocketing upwards. All the same, nothing much has changed in traditional finance, and the much feared recession (that could be worse than recession) is still that black cloud that all can see on the horizon.
Some analysts might say that in a heavy market crash bitcoin is bound to be the first to drop precipitously as investors divest themselves of their risk assets first.
However, it could very much be argued that even if this were the case, bitcoin is the scarcest asset on the planet and the most uncorrelated to all the assets inside of the traditional financial system. In such a chaotic mess with governments going to the money printers to try and prop everything up, bitcoin is likely to be extremely valuable property indeed.
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.