The next report will be on Tuesday, April 8th
Bitcoin is holding up better than the S&P 500 SPDR (SPY) since March, but the Double Top support break remains the active signal on this chart. $BTCUSD formed two peaks in the 110K area (pink arcs) and broke down with a sharp decline in late February. This is the break that broke the bull’s back. Bitcoin continued lower into March and remains in a downtrend.
Despite a downtrend, there are some signs of encouragement because Bitcoin firmed in the 50-61.8% retracement zone (blue shading from 75K to 82K). If the current decline is a correction after the 106% advance, then I would expect it to retrace around half (50%). This is a two-steps forward (+106%) and one step backward sequence (50% retracement). index is down almost 2%. Bond futures are up over 1% as money seeks safe-havens. Bitcoin is also up around .50%, but I am not sure if this is a safe-haven.
An encouraging setup is one thing, a trend reversal is another. The blue lines define the current downtrend with resistance marked at 89K (pink line). A breakout here would exceed the late March high and reverse this downtrend. I would then mark re-evaluation support at 81K.
The indicator window on the chart above shows RSI(10) with momentum resistance set at 60. Bitcoin is volatile and RSI ranges are not constant. However, we can sometimes see RSI peaks or troughs that match the underlying trend. The blue dashed line marks RSI troughs that defined the uptrend in February. Notice that RSI broke to multi-month lows when Bitcoin broke Double Top support (vertical gray line). RSI peaked just below 60 during the current downtrend. A breakout at 60 (pink dashed line) would trigger a momentum breakout, and probably coincide with a breakout at 89K on the price chart.
The next chart shows the Bitcoin ETF (IBIT) with similar characteristics. IBIT is firming in the retracement zone, but still in a downtrend with resistance marked at 50.50 (pink line). RSI broke down in early February and momentum resistance is set at 60. I will respect the downtrend until breakouts change the evidence.
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