The past week has seen a steady correction in the bitcoin price, since the ATH of $58k. As of writing today, price is down over 25% and has found repeated support at around $44k. It looks like a period of uncertainty at this stage. Just where is the bottom of this dip? Is it over as price tests support at $44k for the third time this week, or will support break to the downside and bring further correction?
It does look like decision time for bitcoin right now. One valuable bullish indicator is the fact that price has just found support at the 200 MA on the 4 hour chart. This could act as the final point of decline and a bounce back up would be natural. Another bullish indicator is the bullish divergence on the RSI, where higher lows are being made, despite price making lower lows.
That said, RSI is also making lower highs, like price, and so a symmetrical triangle is forming on the RSI. Nevertheless, the higher lows are giving me confidence in a potential swing back to the bullish trajectory once more, after the week of consolidation.
I may be a bit ahead of price here, and we could still see further downside, but it won’t be for much longer, since we are in a long term bull cycle, and it’s only a matter of time before bitcoin continues climbing toward the fabled $100k mark and beyond.
As a result of this, I have decided to flip bullish on the overall medium term trend at this point. This is not financial advice of course, and just my personal exuberance. It could be impatience too that is clouding my judgement, but I have put in a long position on bitcoin from here, for the next leg up. I also went in small, not too heavy, since I want to have more fiat available on the side in case price does dip further and I can DCA (dollar cost average) in at lower prices.
So far price is being rejected and held down at the 21 MA on the 4 hour., which is the middle of the bollinger band. The RSI is also thus being held below the 50 midrange. Both these two indicators generally do line up – the 21 MA and the 50 RSI level. The overall trend is admittedly to the downside this past week, but I am eagerly anticipating the reversal back to the moon once more.
I am going long here for the long term, so I don’t mind if price still dips further, allowing me to buy still more bitcoin. I will simply HODL and accumulate for the rest of the bull cycle. Another long position I have opened now is Cardano ADA. Even though I’m reserved about altcoins, it’s season now and they are popping like fireworks. Already ADA has been one of the best performing altcoins this year, currently sitting at 5x or a 500% price pump since the start of 2021. That’s epic for only two months.
Admittedly I might be a bit late to enter since ADA made a new ATH recently and is near the top, but it has been outperforming bitcoin massively, since BTC is only up 80% since the start of the year. In a few hours we will have the Cardano hard fork, which is major bullish news. It’s important for the developers of any project to be constantly improving and bringing out better versions of their blockchain.
In fact Cardano is doing so well that it just flipped BNB for third place in the cryptocurrency global market cap. ADA taking third place is legendary, so I am bullish and have put in along position for the long term. I don’t do too much short term trading any more, but prefer to ride the bull trend now for the next few months.
As for ADA outperforming ETH and usurping second place in the global market cap – I doubt it just yet. The gap in dollars is huge between second and third, as it is between first and second. So BTC, ETH and ADA all all in leagues of their own. Although DOT and BNB could also be described as in the same league as ADA. Any of them will be good long entries right now as they are leading the pack.
ADA is looking slightly more bullish than BTC at present, since the 21 MA on the 4 hour chart is acting as strong support, and the RSI on the 4 hour chart is above the 50 midrange, indicating bullish bias. Add to this the bullish fundamental news that a massive Dubai-based crypto investment fund, FD7 Ventures, is about to make a big investment in ADA, as well as Polkadot DOT. They are actually liquidating their bitcoin holdings to buy ADA and DOT. Perhaps they also see altcoin season at present.
Read more about why the massive Dubai investment firm is leaving BTC for ADA here:
It’s all about use case, or solving some real world financial problems for the masses of unbanked people. It looks like they prefer ADA as the new blockchain for us to mint our own tokens, as well as NFTs, giving Ethereum quite some competition. Charles Hoskinson, the founder of ADA, is of course also the co-founder of Ethereum, so we can expect some heated contest between them to deliver the best product. ADA has been a sleeping giant until now. Let us know what your trading insights are regarding ADA, ETH and BTC, by leaving a comment below.