Bitcoin (BTC) falls to major support – bounce now likely
The Bitcoin price fell to $63,500 as the Federal Reserve announced that interest rates would stay the same. However, future rate cuts are being signalled, and the stock market surged on this news. Are the signs there that Bitcoin is about to follow suit?
Noise is obscuring the obvious
Noise, noise, and more noise is enveloping the markets. Will the Fed signal a future rate cut (it did)? How much of the Mt. Gox $BTC will be sold? Will the US government sell any more of its Silk Road Bitcoin? Are the Bitcoin whales stacking (they are)? Is Bitcoin going to once more be rejected from the $70,000 level?
The Bitcoin price goes up – it goes down – it chops sideways. However, what is this asset? For those who truly understand what Bitcoin is, and what it can do, all this noise is just by the by. Bitcoin is in a bull market, and it is likely to keep going up until such time as the bull trend is invalidated.
$BTC latest correction has been arrested
Source: TradingView
In the short term time frame it can be seen that the $BTC price has been falling over the last 3 to 4 days. However, it looks like this small correction has been arrested, and $BTC did not make a local lower low. Instead, the price has bounced nicely from the 0.382 fibonacci, and given the renewed positive sentiment that is creeping back into markets, and the fact that momentum indicators have reset, it could be likely that $BTC makes its way back to the top of the bull flag upper trend line once more.
$BTC inverse head and shoulders could come into play
Source: TradingView
Zooming out on the daily, in order to see the entirety of the bull flag, the remarkable confluence of the fibonacci levels with the $BTC price can be noted. If the price does bounce from the 0.382 level, this would be very bullish, and $BTC would likely get another shot at breaking out of the bull flag.
However, if the price did break down, either from its current level, or from the top of the bull flag, an inverse head and shoulders comes into play, with the right shoulder possibly forming at the 0.618 ($60,000) or even at the 0.786 ($57,000).
Bitcoin will thrive on the increased liquidity to come
The Federal Reserve, and all other central banks across the world, will have to cut rates in order to bring liquidity into markets, or face a total melt-down of economies. In this kind of environment Bitcoin should thrive. This bull market is not over.
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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