BTC Pushing Through HUGE Resistance, But Overbought on RSI!

MagicPoopCannon Updated   
Bitcoin is starting to look bullish for the first time in a while, after it broke above the long term falling resistance (black trendline) today, which originates at the all time high and catches practically every major pivot high since then. The question is, will BTC be able to remain above this major resistance level, and potentially hold it as support?

In addition to breaking out above the falling black trendline, we can see that BTC has also cleared the 38.2% retrace (in red) for the entire 2018 bear market. While this is definitely a positive sign, it's probably wise to exercise caution here. You can see that the RSI is in overbought territory. So, there's a chance that BTC could turn back to the downside, and fail to hold above the black falling trendline.

Looking closer at the RSI, we can see that it is making a higher high than the previous peak (from February) while price is still below that peak. So, even if BTC does turn lower here, it would be forming a bullish divergence on the RSI.

My primary concern is the state of the equity markets. I'm worried that the stock market has become irrationally exuberant in the recent rally, and I think it's likely that we could see another retest of the lows, and potentially even lower lows than what we saw in the past few months. So, if the equity markets turn lower, and we see a continuation of the recession, I think it would be practically guaranteed that crypto would continue to get punished. I know a lot of people don't like to hear that, but it's reality. Crypto is a risky and highly speculative investment class. Investors don't generally flock to risky investments in times of recession. Let's not forget that over 30 million people in the US have filed for unemployment, and hundreds of millions more are out of work worldwide. That's a massive reduction in buying power and potential crypto investment demand.

On that note, there's one thing that I think can really propel crypto to new heights at this point — and that's a loss of confidence in traditional fiat currency systems. Given the extraordinary worldwide debt crises, and the absolutely reckless monetary expansions of global central banks, we could see a loss of confidence in fiat soon enough.

The Gaussian channel has turned green, signaling that a shift in the trend may be occurring right now. However, the daily RSI is overbought. So, keep an eye on the current price action. If BTC can hold above the black trendline, and consolidate above it, we could see a move higher, with a retest of 14K as a possibility. However, if BTC fails to hold above the falling black trendline, and particularly if more global economic problems arise as a result of the coronavirus recession.

I'm The Master of The Charts, The Professor, The Legend, The King, and I go by the name of Magic! Au revoir.

***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***

Don't forget that BTC still hasn't surpassed the previous February high. So, until that happens, and a higher low is formed, BTC is still in a technical downtrend. Additionally, its overbought, while challenging huge resistance. Don't get too confident until the time is right.

Thats actually a hidden bearish divergence thats forming on the indicators, in addition to being overbought.


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