Last week was a rough one for the king of cryptos, but is it all over and are the bulls ready to jump back in?
Back to the Uptrend for Bitcoin?
On the daily chart above of BTC/USD, we can see a solid uptrend in play, but bitcoin dropped last week after hitting all-time highs just above the $58K handle. This is likely a reaction to U.S. Treasury Secretary Yellen’s criticism of Bitcoin, Elon Musk’s comments that bitcoin “seems high” and pressure on assets as bond yields were rapidly rising last week.
Rising bond yields were likely the main driver for last week’s price action across financial markets, so with bond yields pulling back slightly today, it makes sense that the fall in assets have slowed, or even reversed for many markets.
For bitcoin, we’re seeing support at the 38% Fibonacci retracement area on the daily chart above, which almost correlates with the previous major swing high around $43,400. And with stochastic signaling potential over done selling pressure, medium to longer-term traders may see this as a buying opportunity in the longer-term trend higher.
So, for you bulls out there, this could be the chance to play the uptrend at a better price, and when using the other side of the Fibs as a stop guide and the Fib extension tool to find a potential target around the $72K handle, the potential risk-to-reward looks very attractive as well. And to add to the probabilities of success for the bulls, we saw quite a few bullish headlines in today’s news feed:
For you bears out there on bitcoin, the bond rout may be taking a breather at these levels, and if that sell off resumes, selling pressure could come back to all assets, including bitcoin. A break below the Fib retracement area would likely be bearish for BTC, so watch out for that scenario before considering selling a fresh BTC position, or trimming any current long positions.
What do you guys think? Is the sell-off overdone? Back to the longer-term uptrend?
Let me know in the comments below, and as always, remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Create your own ideas and don’t simply follow what I do.