Bitcoin - Retail's irrational bulishness foreshadows more pain

At the moment, Bitcoin holds up above the resistance level at 31 411.48 USD, which is bullish. If the stock market erases losses and ticks higher, then we expect it to positively impact the price of Bitcoin; as a result, we still speculate that Bitcoin might rise as high as 36 000 USD. However, the weekly and monthly time frames remain bearish which does not force us to abandon our bearish medium and long-term outlook. We still expect the rally in stocks to be short-lived, and the same we expect from BTCUSD. Therefore, our price target stays at 25 000 USD.

Illustration 1.01

Illustration 1.01 shows two recent bullish breakouts (above the resistance at 31 411.48 USD and above the sloping resistance).

Technical analysis - daily time frame
RSI halted its rise; at the moment it is flat. MACD is bullish but still within the bearish zone. Stochastic is bullish. DM+ and DM- failed to perform bullish crossover so far. Overall, the daily time frame is bearish.

Illustration 1.02

The picture above shows bullish breakouts in more detail; invalidations of breakouts are also indicated by yellow arrows. We will pay close attention to the price of BTCUSD; if it manages to hold up above resistance levels, then it is likely to continue higher (especially if the stock market rises).

Technical analysis - weekly time frame
RSI did not break its bearish structure. Meanwhile, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the weekly time frame stays bearish.

Please feel free to express your ideas and thoughts in the comment section.

DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.

Trade closed: target reached:

Our price target of 25 000 USD was reached.