Bitcoin (BTC) surged over $119,600 on Monday morning, up around $3,000 already on the day. However, volume is failing to come in to confirm that this breakout is legitimate. That said, there is still time. Could this breakout take out the previous all-time high and go to $130,000 and above?
Where is Bitcoin going next?
Where Bitcoin is going next, no person knows. It might well be speculated that given the disastrous state of nation budgets, and the huge likelihood of more central bank printing of fiat currencies, that assets such as Bitcoin will probably keep rising. However, there are no certainties, and the next black swan might be just around the corner.
Kiyosaki warns of a Bitcoin “bust”
Robert Kiyosaki, renowned author and entrepreneur, is warning of a Bitcoin “bust” that may be about to happen. He does say though, that if this does take place, he will be buying. While Kiyosaki certainly knows real estate, he is not an authority on Bitcoin, besides knowing that long term, it is a great buy.
Will the UK sell its Bitcoin?
A nation state may be about to sell its Bitcoin. If the Sunday Telegraph is to be believed, the UK Chancellor, Rachel Reeves, is thinking of selling around $5 billion worth of $BTC in order to help shore up a nasty shortfall in public finances.
It seems the UK will never learn. All of the trumpeting made by former Chancellor, and eventual Prime Minister, Rishi Sunak, where he promised to make the UK a global hub for crypto, turned into an anti-crypto regime that not only made regulatory compliance extremely difficult for crypto businesses wishing to set up shop there, but also made life hell for UK citizens who wanted to purchase crypto.
The UK does have a past history of incompetence relating to its asset holdings. Gordon Brown, UK Chancellor at the turn of the century, decided that it would be a good move to sell a large chunk of the UK’s gold. He announced the idea to the market, and said when he would sell. The market brought the price down as low as possible, bought all the gold, and then watched with satisfaction as gold increased around 700% over the next 10 years.
$BTC breakout or fakeout?
Source: TradingView
The 4-hour chart for the $BTC price shows the breakout of the triangle. It can also be seen how the price has come back to either test the top of the triangle, and the $119,000 support/resistance, or it is about to fall back inside the triangle, signalling a fakeout. Very low breakout volume could support the latter outcome.
Nevertheless, if $BTC is breaking out, what the price has done up to now is perfectly reasonable and to be expected. Bulls will be looking to take charge from now on in. As far as market manipulation goes, the sweep underneath the triangle and the support levels on Sunday would likely have taken out the stops of those going long. Perhaps a dip back into the triangle could also take out those stops yet again?
No volume support for breakout
Source: TradingView
The daily chart shows the large amount of volatility around the current levels. However, the volume profile reveals the smallest of green bars so far. Certainly not a good signal to reinforce a breakout.
The RSI at the bottom of the chart illustrates that the indicator line is angled back towards the top. That said, it will need to get above the previous high of 78.29 in order to nullify the bearish divergence that is still a threat in the background.
Is a Bitcoin fall coming?
Source: TradingView
The weekly chart for $BTC, seen through the eyes of a bear rather than a bull, could be suggesting that Robert Kiyosaki’s “bust” might indeed come to pass. The $119,000 resistance is proving a tough nut for the bulls to crack.
In addition, the RSI reveals that the indicator line might just face a third rejection at the trendline if the current breakout does fail to materialise. The bearish divergence on this time frame is far more concerning than on the daily time frame, as price moves up while the RSI continues to trend down.
At the bottom of the chart, the Stochastic RSI has its indicators very near the top. Are they about to pivot and turn back down again?
All of these factors are a worry for Bitcoin bulls. Nevertheless, if one zooms further out into the 2-week and the monthly charts, the bullishness does return. Therefore, could there be a short-term pullback, followed by a continuation of the bull run? This remains to be seen, and time will tell.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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