BTC : still awaiting correction of excess sell off
I expect a significant upside turn of BTC price action in the next 1-4 weeks. Why?
1. The excess sell off in May, which took price action all the way down to the 2017/18 cycle bottom support line, has still not been corrected. That excess sell off was an equal response in terms of volatility to the overshooting which took BTC to the "unreal" Nov 21 ATH.
2. Following the mid June capitulation of miners, we observe considerable bullish divergence in RSI.
Is that scenario supported by fundamentals? Think so: fossile energy asset prices tank, inflation will follow (or has already started following). FED will have to cut rates soon unless they want to see USD real rates blow off the roof. That will correct the excessively overbought USD against the world's currency basket, including BTC.
1. The excess sell off in May, which took price action all the way down to the 2017/18 cycle bottom support line, has still not been corrected. That excess sell off was an equal response in terms of volatility to the overshooting which took BTC to the "unreal" Nov 21 ATH.
2. Following the mid June capitulation of miners, we observe considerable bullish divergence in RSI.
Is that scenario supported by fundamentals? Think so: fossile energy asset prices tank, inflation will follow (or has already started following). FED will have to cut rates soon unless they want to see USD real rates blow off the roof. That will correct the excessively overbought USD against the world's currency basket, including BTC.
Catatan
since 3 days BTC is testing the upper boundary of the prevailing bear channel (see chart) - breaking that long standing resistance will provide the necessary momentum for the next leg up to 26 / 27 TUSD ... I expect that to happen until Nov. 15thCatatan
FTX picked the right moment for its crash when the above chart requested a decisive move of price action (bearish channel upper resistance crossing the long term trend support line). For now, the bearish channel prevails & keeps price action within the boundaries of a rising wedge with continued bullish divergence. So there may not be too many forced liquidatations of further large BTC portfolios ahead of us.Catatan
another High Noon event is now. If BTC does not break the brearish upper resistance this time, further decline to something around 11.800 is possible. A rise to 19.300 is needed to justify bullish expectations.Catatan
after all, BTC has now regained a strong footing within the long-term channel of growth. We are just touching the upside barrier of that growth channel right at the time when the centerline of the long-term bearish channel comes across. Does that happen just by accident? I don't think so. That bearish channel crossover at 27,5 KUSD is a decisive resistance. If price action will break that resistance, there is quite a lot of headroom up to 36-37 KUSD.Catatan
BTC still running in the longterm growth channel quite steadily and is again testing the upper resistance zone of that channel. While in past months the centerline of the 2021/22 bear market channel (dotted line in the chart) served as a blocking resistance, we can see BTC has broken that resistance around Sep. 09, which seems to me a clearly bullish setting.Catatan
with the dotted centerline of the extended long term growth channel around 40K USD as the new price targetCatatan
This idea is now closed, as price action has meanwhile neutralized the excess sell-off (long squeeze) of June 21. BTC has now regained neutral territory. Here is where the stronghold resistance around 36K USD is to be found. We should prepare for a consolidation movement back to support levels around 31K. Short sellers may take profits there.
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