Bitcoin ($BTC) made its biggest daily move in its history on Monday, with a towering $8,343 rise. Stopping on Tuesday, just short of $90,000, could this be the top for now, or is it possible that this incredible move could continue?
Is gravity about to kick in?
What goes up must come down. The law of gravity not only applies to the physical world, but in its essence, also to the world of financial assets. Bitcoin has been on the most breathtaking rampage to the upside since Donald Trump won the U.S. presidential election. Surely it must be time for even the king of the cryptocurrencies to take a breather.
There has been so much promise and good news for Bitcoin that this has propelled it to the dizzy heights of $90,000. Some may say that this is still way short of the $BTC eventual top, but the path to the market top will still have plenty of reversals – some will probably even be quite deep.
MicroStrategy buys another $2 billion $BTC
Reaching a price of almost $90,000 coincides with Michael Saylor’s MicroStrategy buying another huge parcel of Bitcoin. MicroStrategy has just bought a bag of 27,200 $BTC, worth around $2 billion. Yes, this is a massive fillip for Bitcoin holders, but could it also be a ‘sell the news’ event?
U.S. Spot Bitcoin ETFs buy another $1.12 billion $BTC
On the U.S. Spot Bitcoin ETF front, current buying would tend to support even further possible price rises. On Monday, the ETFs bought 13.94K BTC at a price of 1.12 billion. The Blackrock IBIT ETF was responsible for $763.6 million of the total.
Any $BTC left on the OTC desks?
Rumours are also circulating on social media that the Bitcoin OTC desks now have only scant supplies of $BTC. With the MicroStrategy purchase and the strong ETF inflows, who knows what might happen once retail and the main body of the institutions arrive and start to buy?
$BTC potentially rejected from 1.618 Fibonacci level
Source: TradingView
Be that as it may, the Bitcoin weekly chart is telling a story. Now that it is in price discovery, the $BTC price is more difficult to predict, given that there are no previous price levels to match the current price. That said, the Fibonacci sequence is an incredibly accurate predictor of future price resistances, and ascending trendlines can also give some guidance.
The weekly chart is showing that the $BTC price has potentially been rejected from the 1.618 horizontal level. Of all the Fibonacci levels, this is the most important in trading, and so this makes perfect sense.
If this is going to be at least a half-decent correction from here, the price could be expected to return to the 1.272 Fibonacci, at $80,300. A much deeper correction could even return the price to the previous all-time high at around $74,000.
Price hits ascending trendline from 2021 bull market top
Source: TradingView
Zooming out to take the previous double top from the last bull market in 2021 into account, it can be seen that a trendline drawn though both of these tops actually coincides with the $90,000 horizontal level, which was almost hit earlier on Tuesday.
This is just another piece in the jigsaw puzzle of where this next top might be. It does rather look as though this could be it. Traders and investors beware. That said, this is potentially just a healthy reversal before the next leg upwards, and not an early end to the bull market …
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.
Source: https://cryptodaily.co.uk/2024/11/bitcoin-btc-stops-just-short-of-90k-is-this-the-top-for-now