Bitcoin (BTC) closed the week above $58,000. Late summer months are usually not easy for the bulls, therefore look for $BTC to continue to chop sideways, at least for this coming week.
More sideways price action
After a great recovery last week, following the yen carry trade sell-off, the end of the week saw the $BTC price head lower again, and the weekend also contributed to further sell-offs in price, which has brought $BTC back down to the $58,000 level.
Early trading on Monday saw $BTC fall as low as $57,700, before recovering. With the weekly stochastic RSI (momentum indicator) still heading to the bottom, it might be expected that the rest of this week sees $BTC traversing sideways, and perhaps further downwards.
On Tuesday and Wednesday, the U.S. government will release PPI and CPI inflation figures. While no big changes here are expected by the market, $BTC could suffer some higher volatility around this time.
Short term bounce inbound?
Source: TradingView
In the short term time frame of the 4-hourly, it can be noted that the $BTC price has nearly gone as far down as the 0.382 fibonacci at around $57,500. If the price is to continue to bounce from here, that would be bullish. However, if the price does continue down, the 0.618 fibonacci should provide support below at $54,300.
$62,000 and possibly $65,500 to come
Source: TradingView
Looking at the bullish case for $BTC, and taking the fibonacci levels for an upside move, it can be seen that the $BTC price has based nicely at $54,000. Currently the price is resting on the $58,000 support, so a bounce from here would retry the 0.618 at the $62,000 level, and then if successfully held above, $65,500 is the 0.786 fibonacci target.
$58,000 critical support level
Source: TradingView
Finally, zooming right out into the weekly time frame, this macro chart shows just how important it is that $BTC holds at $58,000. This level was important support and resistance at the top of the last bull market, and this is playing its part in this particular bull market.
The very long wick down, from all the selling and then buying of $BTC last week, is likely to be a major bullish factor for upside price momentum. That said, the weekly and 2-weekly stochastic RSIs still have at least another week before they bottom, and then there could be a week or two for confirmed upside crosses of the indicators to take place. Momentum is coming, but we may need to wait until September before it really kicks in.
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.
