Bitcoin looks well placed to break out of its long-established weekly channel, according to FullyCrypto’s in-house analyst Will Gambit of CryptoDayTraders, although we could see a dip to the $8,000s before breaking out. Here, Will looks into Bitcoin’s current position, why he’s bullish overall, and what needs to happen in order for Bitcoin to meet his expectations.
Bitcoin Stuck in Weekly Channel
Bitcoin has been in a clear channel on a weekly time frame, and the below chart shows clearly how it has reacted on range deviations:
Having consolidated in this range for over two years, I am bullish that we are on the verge of finally breaking out and moving firmly into the five digit range, although we may have a short-term dip.
On a lower timeframe I’m seeing tight consolidation with declining volume on this entire move up:
The Money Flow Index (MFI) is rounding and dropping, which suggests that Bitcoin is moving toward an oversold position. We may therefore soon see the range EQ tested, which would likely see us retest the 50% level on the MFI. To remain bullish we would need to see a bounce off this level:
In addition to these technical indicators we can also see that the traditional markets, including the S&P 500, to which Bitcoin has been closely correlated of late, are now fighting to break through recent highs after recovering well from a potentially disastrous retracement in early June.
Bitcoin therefore looks great from a fundamental and technical perspective at the moment, and will continue to do so right down to the $7,500 region. As usual this isn’t investment advice, but I’d be buying the dips.