With the market full of expectations for Trump's proposal to create a national Bitcoin reserve, and optimistic expectations for the Federal Reserve's rate cut this week, Bitcoin surged past the $106,000 mark this morning, breaking the previous high record set on December 5. Bitcoin has risen for seven consecutive weeks, marking the longest weekly winning streak since 2021. Since the U.S. elections, Bitcoin has soared over 55%, with an increase of over 14% in the past month. The market sentiment indicator 'Fear and Greed Index' has soared to 83 points, entering the 'Extreme Greed' zone, indicating that investors are extremely confident about the future market.
However, Bitcoin's upward momentum may face correction risks, especially as the rate of increase slows down, which may indicate increased short-term pullback pressure. As of the drafting time, it has fallen back to $104,615, with an increase of about 2.75% in the past 24 hours.
Trump's friendly attitude towards cryptocurrencies has completely reversed the high-pressure regulatory atmosphere of the Biden administration, becoming an important driving force for Bitcoin's rise. He not only proposed establishing a national Bitcoin strategic reserve but also called for the U.S. to become a leader in the global cryptocurrency industry, reigniting market expectations. Such policy direction is undoubtedly a catalyst for Bitcoin to break new highs and will also drive the cryptocurrency market into a new wave of frenzy.
The Federal Reserve will hold an interest rate policy meeting on December 18, and the market generally expects a rate cut of 25 basis points (0.25%). If the interest rate decision meets expectations, it will further drive funds into the high-yield cryptocurrency market.
Bitcoin Four-Hour Chart
Firstly, based on the Bollinger Bands indicator on the 4H chart of Bitcoin, the current price is near the upper band of Bitcoin, in the overbought zone, which indicates a risk of a pullback in the short term. The Bollinger Bands channel is expanding upwards, indicating that the overall market is in an upward trend, but the price deviation from the upper band is significant, making it prone to corrective movements.
Secondly, based on the KDJ indicator on the 4H chart of Bitcoin, the K line value and D line value are located in the overbought area above 80, while the J line value is at an even higher position and has started to flatten. This situation shows that the market is in the overbought area in the short term, and a pullback correction may occur.
Lastly, based on the MACD indicator on the 4H chart of Bitcoin, the DIF line and DEA line are above the zero axis, indicating that the market is still in a strong bullish phase. The MACD histogram is in red and is gradually increasing, showing that the current bullish momentum is strong, but it is necessary to be aware of the possibility of divergence at the top. If the MACD red histogram begins to shorten, it indicates that bullish momentum is starting to weaken, and the price may experience fluctuations and pullbacks in the short term.
Bitcoin One-Hour Chart
Firstly, based on the Bollinger Bands indicator on the 1H chart of Bitcoin, the price has begun to retreat after reaching the upper band and is currently above the middle band. The Bollinger Bands are opening upwards, indicating that the market is in an upward trend. However, there is resistance after the price touches the upper band, showing signs of a pullback. In the short term, it may retest the middle band (104000) area for support; if the price stabilizes at the middle band, it may continue to challenge the upper band.
Secondly, based on the KDJ indicator on the 1H chart of Bitcoin, the KDJ three-line values have already turned downward from the overbought zone. Although no obvious death cross pattern has formed, it also indicates that the short-term market may face pullback pressure.
Lastly, based on the MACD indicator on the 1H chart of Bitcoin, the DIF line and DEA line have formed a death cross at high levels, indicating that short-term bullish momentum is weakening. The MACD histogram has also changed from red to green, showing that market momentum is gradually weakening, suggesting that there may be pullback pressure in the short term.
In summary, the Bollinger Bands channel is still opening upwards, indicating that the overall trend remains upward. However, the MACD on the 1H level has formed a death cross, and the KDJ indicator is in the overbought zone, suggesting that there may be some pullback pressure in the short term. It is crucial to pay attention to the support strength near the middle band (104000) on the 1H level; if it effectively breaks below the middle band, it may further test the 103000 level.
In conclusion, Daxian provides the following suggestions for reference
Suggestion One: Short Bitcoin on a rebound to around 104800, target 103300-103000, with a stop loss at 105300.
Suggestion Two: Buy Bitcoin on a pullback to around 103300, target 104000-105000, with a stop loss at 102800.
Drafting time: (2024-12-16, 17:30)
(Text - Daxian says cryptocurrency)
