Image from Open AI chatgpt
I've been monitoring the price action of Bitcoin closely for the past well, little while, and for the most part, the most current signals aren't exactly giving me a lot of confidence that the rally will be sustainable. After the strong April rally from the $75K levels, Bitcoin broke above the $110K level, but the momentum may be coming down.
What caught my eye was a research done recently by John Bollinger yes, the same fellow who created the Bollinger Bands indicator. He made a statement that will catch the eye of seasoned traders immediately, Bitcoin made three individual pushes upward, each testing the highest Bollinger Band and each followed with a brief disappointment.
That behavior the so called three pushes does tend to indicate the end of a short to mid term trend.
To me, this signals no alarm bells but an opportunity to take a step back and review. When the trend constantly turns away from important technical levels and cannot break through after a substantial rally that usually indicates that we're entering a phase of consolidation or maybe even positioning ourselves for a pullback.
Even more fascinating is the broader backdrop. There's allegedly a wall of sell orders stacked up between here and $120K. That's a lot of resistance to break. Add in global uncertainty, Middle Eastern tension, the secrecy of U.S. China dealings and the backdrop does not exactly signal for a bull run. And yet there's this strange resiliency. All of the headwinds notwithstanding, Bitcoin hasn't rolled over entirely. There are some firms, including QCP Capital, that point to institutional interest that hasn't evaporated. My own belief is that it's the demand that's keeping BTC from falling off the cliff.
The bottom line is I would not write off Bitcoin yet, but the rally may have hit a ceiling short term. If you're a short term trader, this may be the instant to stay sharp and hang tight for support near the $100K level, because if that gives, we may see a steeper correction.
If you're an investor looking for the long term, patience may be the difference maker until the next solid trend bullish or bearish starts to form.
