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Bitcoin is currently moving sideways into a bull pennant. A break to the upside or the downside should come later on Friday or early on Saturday.
Impending break out
After rising a healthy 18.6% since the previous Friday, and completing seven daily green candles in a row, bitcoin bulls needed to take a breather, and a flag that enabled the alpha currency to track downwards and sideways for a while was the most bullish way to do this.
The bullish pennant in which it finds itself has broadened out over the last 24 hours in order to become longer, but continue to contain the price inside. If the price keeps within the flag until its pointed end it should break out on Saturday morning. However, bitcoin would normally be accustomed to breaking out from ⅔ to ¾ along this trajectory, and the price has arrived there now.
Six out of the last eight 4-hour candles have been red so the price is at the bottom of the pennant now at around $33,950. 4-hour and 8-hour Stochastic RSIs have bottomed, and the 12-hour could bottom at the weekend. Both weekly and 2-weekly Stochastic RSIs are climbing, and the monthly may cross back up by next Wednesday which would signify an extremely bullish longer term outlook for momentum.
Bitcoin de-correlates from stocks
Bitcoin’s rally has been unusual in that it has completely de-correlated from the S&P 500, and even from the tech-heavy Nasdaq. While the S&P has lost 5%, and the Nasdaq 6.3% over the last week, bitcoin has put on 14.6%.
Smart money moving into bitcoin
Is the smart money finally beginning to realise that bitcoin is that hedge outside of the fiat economy that it was always supposed to be? Bitcoin’s history is still short, but it does point to a repetition of the 4-year halving cycles, and if this is to repeat again, bitcoin is probably in phase 1 of its up cycle.
Looking across into the traditional monetary system, it can be seen that further heavy debasement of fiat currencies must take place in order to cope with debt, keep the banks afloat, and prop up bond markets, just to name a few of the ills that beset this system.
Bitcoin’s scarcity, its known supply, its security, its inability to be manipulated by any individual, institution, or government, make it a fantastic asset for storing wealth outside of the fiat chaos. With all this in mind, this bitcoin bull market should be no different to previous ones.
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.Investment Disclaimer