Bitcoin Price Could Rally to $9K Before a Massive Collapse, Here’s Why

Bitcoin price (BTC) has been in a sidewards range for several weeks now, with some people on team carry calling for fresh lows in the region of $3,000 while the bulls have been calling for astronomical all-time highs soon. One thing that is apparent in the market, is that you lot have to take it 1 week at a time.

With Bitcoin currently heading towards the mid-$seven,000 range, is it fourth dimension to flip bullish? Or is this yet some other low liquidity Sun pump to create CME gap-filling opportunities?

Daily crypto market performance. Source: Coin360.com

Merely Sir, the CME gap

Whether you are leverage trading, or just moving your Bitcoin into a stablecoin during the dips, if you are not capitalizing on the weekly CME gap, you're missing a flim-flam. However, the more obvious these gap fill trades become, the more likely information technology is that they volition soon become a thing of the past.

Christmas week is a week that I took off trading. The reason is that the CME was closed on the 24,25 and 26th of December, which meant attempting to trade a gap fill was slightly more difficult. Equally the gap left on Fri, Dec. xx would have needed to fill on Monday, December. 23, and so Monday, Dec. 23 left a new gap to exist filled on Friday, Dec. 27.

Side by side week is set to be the same, with the CME Holiday Agenda citing that trading will be closed Dec. 31 to January. 2, 2022.

BTC USD daily chart. Source: TradingView

It seems that traders with greater exposure to Bitcoin are driving the price during the weekend when the volume is thinner, and so waiting on institutional traders to fill the gap the following week.

Notwithstanding, with institutional money taking an extra vi days off over the holiday pause, it means more than thin book periods for the cost to be driven by whales in this 24/seven market.

So while the bankers may sleep, Bitcoin, in fact, does not sleep, and this could open up a window for a brusque-term rally before the bear cycle resumes.

The weekly MACD has started to lean bullish

BTC USD MACD weekly chart. Source: TradingView

The Moving Boilerplate Convergence Divergence (MACD) indicator is showing early tell-tale signs of a bullish reversal. All the same, I don't expect this to continue. As can exist seen in the prototype higher up, the MACD line changed its bearish course on Dec. 16, but why?

I believe that due to a lack of institutional involvement over the Christmas period, the market was hands moved upwards, which has inverse the trajectory and with it, has connected to print pale pinkish candles, which are getting shorter by the week, ordinarily indicating a cross into green territory. This has given some hope of a relief rally earlier the real hurting begins for Bitcoin.

But where could nosotros meet the digital asset motility?

The weekly Bollinger Bands advise a temporary bottom

BTC USD BB Weekly nautical chart. Source: TradingView

Using Bollinger Bands (BB) Indicator overlayed with my indicator that shows pin points based on momentum, Bitcoin appears to accept entered a short-term balderdash phase that will well-nigh likely see a rejection around the moving boilerplate of $9,000.

I believe this to exist the case, every bit brusk-term low liquidity pumps falter around the moving boilerplate, as can be seen at the end of October. This is where Bitcoin cost experienced an unnatural pump, which saw the digital asset climb around $ii,500 in 48 hours, and despite a momentary wick above the MA, it failed to hold higher up this point and presently resumed its carry tendency, feeding off the blood of hodlers at the bottom of the BB.

As such, with the institutional players easing upwardly over the holiday period, it's a perfect opportunity for the cost of Bitcoin to exist pushed up to around this level.

At this stage, yous may be asking why I only run across a short-term relief rally and non a total reversal. The reason for this lies in the Relative Strength Index (RSI) indicator.

The RSI shows no articulate buy signal

BTC USD RSI weekly nautical chart. Source: TradingView

The RSI is currently very much in the middle with a reading of 42.xx on the weekly. This doesn't signal anything to anyone, and every bit such, would not attract any significant coin into the market. When the RSI is planted between thirty and seventy, we're simply in a ranging market place where scalpers feed and hodlers bleed.

Right now, anyone with any significant cash holdings would exist hesitant to get all-in on an asset at this betoken, whether it be Bitcoin or anything else. As such, this to me says we must first see more than downside before Bitcoin becomes an attractive investment opportunity for smart coin.

You lot only have to look at the terminate of 2022 and the beginning or 2022 where Bitcoin held an boilerplate toll of $4,000 to run across why the RSI is a valid indicator for buying Bitcoin, as ownership in the oversold territory would have seen you gain over 300% on your investment throughout 2022.

 The Daily RSI is Neutral

BTC USD RSI DAILY chart. Source: TradingView

The daily RSI is also incredibly neutral, more-and so than the weekly RSI. Information technology's currently sitting on 52.sixteen, which again sends no ownership or selling signal to investors.

A pump towards $9,000 would certainly plant this in oversold territory, which could spark a sell-off, with people trying to embrace their hemorrhaging losses after FOMO-ing in at $x,000 levels earlier this twelvemonth thanks to a wave of social media influencers prematurely declaring that BTC is in a bull market.

Incidentally, the monthly RSI is reading the same as the daily, so no need to look at that today. Yet, I volition expect at the monthly BB.

Bitcoin is struggling to stay above the Moving Average

BTC USD BB monthly nautical chart. Source: TradingView

As Bitcoin continues to stay in a sidewards range, the inevitability of an extinction-level outcome that will cause fifty-fifty the die-hard Bitcoin maximalists to question why they HODL lines of code, looks more than and more likely.

Having pierced through the MA ii months in a row, and with the red candles getting longer past the month, it seems that Bitcoins back up is simply effectually $400 away, before falling to painful lows.

The back up on the Bollinger Bands is currently $2,550 and whilst Bitcoin has never actually touched the support on the monthly BB, that's not to say it won't take a skillful run towards information technology should $7,010 neglect to hold in the short term.

Bullish scenario

With the CME but being open 2 days next week, wait the unexpected. This could go both ways (and I expect it probably will). But from a balderdash's perspective, I'd be looking at the moving average on the weekly of $9,000 as the target before being rejected. If information technology continues past this price, the next level of resistance is $11,300. However, this doesn't seem likely.

Bearish scenario

After the CME gap fills at $7,265 — which is likely to happen tomorrow — history tells us that the price volition revert to the previous tendency. Yet, should information technology continue to autumn, the Bitcoin price only needs to fall a further $150 before information technology finds itself at the support of $7,010.

If this fails to hold, information technology'southward game over Bitcoin, and the route of pain will truly brainstorm. Any movement beneath $7,000 could quickly recover on Friday, January. three depending on when the CME closes Monday evening.

But since this is nevertheless the holiday season, I don't look the real carry trend to resume until the calendar week commencing on Jan. half-dozen once all the suckers have gone long. That being said, if it did continue to fall, $6,800 is the support on the daily BB for Bitcoin, which is a primal level to have notation of.

The views and opinions expressed here are solely those of @officiallykeith and do not necessarily reflect the views of Cointelegraph. Every investment and trading movement involves risk. You should acquit your own enquiry when making a decision.

Source: https://cointelegraph.com/news/bitcoin-price-could-rally-to-9k-before-a-massive-collapse-heres-why

Posted by: wrighthathery.blogspot.com

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