Bitcoin is once again at a crossroad. In this analysis we'll look at the bullish versus bearish setups. In this case we'll look at how and when we'll know (yes, KNOW) whether Bitcoin is still in a bigger correction mode, or whether it's ready for new all-time highs. Stay tuned, and if you appreciate this analysis then please return the favour by caressing that like button. And pop a line should you have any comments or questions. Let's get to business.
First and foremost, Bitcoin is in the midst of a potential channel outbreak after having dipped by -40% - a magical retracement number in Bitcoin to anyone who knows their Bitcoin history.
As long as this breakout can remain intact, things do in fact look promising. And especially so as this downwards spiraling range has been rather narrow. This low volatility has on its own paved the way for a significantly expected move.
What's next is that Bitcoin has respected this key horizontal support zone ...
... at which we've now also seen a local double bottom.
If we look crassly at the graph we can easily identify that we're up against some serious, wide EMA ribbons ahead ...
... but given that we're highly likely still in a primary corrective mode, this is one of those indicators that could in fact act as noise when utilized in the wrong fashion or at the wrong time.
How then do we motivate Bitcoin still being in corrective mode? Well, if we look at the RSI on the daily chart we see that it has swapped back and forth between a bullish red and bearish blue RSI channel. And to those of you who may not know, an RSI channel automatically shifts to a bullish red upon closing above the upper bullish red line, typically set at 70. The same applies in reverse at which we automatically get a bearish blue channel upon closing below 30. For more on this, please watch the extensive RSI trilogy.
Now, why is it relevant at all whether Bitcoin moves within a bullish red or bearish blue channel? The answer is simple: Whenever something is trending, it'll stick to either. As you can see if we zoom out a bit, Bitcoin has been in a long, persistent bullish red RSI channel all the way back to April 2020 at which Bitcoin was trading at $8 800. And mind you, not once since then - corrections included - has the RSI swapped from its bullish channel.
Then came last year during which the spring plunge changed the tune. On the graph below you can see precisely where the RSI swapped channels.
Given that we did NOT get a lower bullish red line closing prior to making our way up, this was in fact a dire warning to the attentive analyst that we, despite our new recent all-time high, were still in a corrective mode.
Unless we can make a clear lower bullish red line closing on the daily ...
... we are by no means done with this seemingly flat correction.