Bitcoin Holds Up as AI Trade Crumbles

The AI trade continues to go south as Wall Street takes profits. Could this bring the stock market down? Bitcoin is holding firm up to now, but if the stock market falls the $BTC price will probably go with it.

Possible break up/breakdown coming soon

Source: TradingView

The 4-hour time frame illustrates how the $BTC price is still grimly hanging on to the rising channel and the bottom of the upper parallel channel. Now inside a wedge pattern, the price is going to either break up or down, and soon.

In fact, with the Stochastic RSI indicators on their way down, and the indicator in the RSI looking as though it may break back down beneath the descending trendline, a break to the downside is probably the more likely direction.

Fakeout of ascending channel?

Source: TradingView

Into the daily time frame the $BTC price can be seen hanging below the ascending trendline. Is this a fakeout, or the beginning of the next stage of a correction? The 50-day simple moving average (SMA) appears to be doing a great job of holding the price up. Several recent candles have pierced through, as witnessed by the tails they left behind, but no candle body has fallen through thus far.

At the bottom of the chart, the Stochastic RSI indicators in this time frame have well and truly bottomed, and are now heading back up. It just remains to be seen whether they will bounce around for a while before climbing and signalling upside price action as they pass the 30.00 level.

Bitcoin holding firm, but for how much longer?

Source: TradingView

Will the $BTC price eventually confirm a breakdown of the ascending channel? Is it ready to start falling? The answer to both is yes, quite possibly. However, until such time as the price closes another weekly candle below the lower trendline of the rising channel, the trend is still up.

A lot will depend on the weekly Stochastic RSI indicators. If they head straight down, the price will also come down. It just depends on whether they can find a bounce - probably around the 80.00 level. 

To sum up, while the $BTC price has held up really well in the face of hot inflation data, surging bond yields, a climbing oil price, and a strong dollar, the U.S. stock market has not. Could Bitcoin buck the trend while the stock market goes down? Not very likely. 

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.