Bitcoin Still in Control

As technical analysis suggests, the consolidation in BTC – Bitcoin, is still happening currently. It has been going on since the last article I wrote about cryptocurrencies back in March. Therefore, since BTC has not broken down below the low at the end of April of $56,555 on a closing basis. Today is very important in terms of where BTC closes at the end of the day. If it is below $56,555, then the consolidation pattern I just described will have been broken to the downside and prices will continue to be under pressure and could continue to make new lows. Regardless of the price action, Bitcoin is still the leader in this digital currency asset class. As goes Bitcoin, so goes the rest of the tokens. Of course, there are some exceptions in some of the smaller alternative coins, but for the most popular coins that matter the most, this is the case.

If you look at a daily chart of BTC over the last 3 months, you can see a definitive range between 56k and 72k. This is the consolidation I am talking about. The longer Bitcoin stays in this range, the more pent-up energy it will have when it breaks out of this range, up or down. It looks to me like we will break to the upside within the next few weeks, but that may just be wishful thinking on my part because I am long. There are other factors in the financial markets that support this thesis. However, since I want to focus on BTC, I am not going to go into those right now. Just know that technically, I am seeing more strength than weakness in the crypto space. There is a good chance that BTC is trying to find a bottom, to the current sell off, right here at these levels around 56k.

However, if BTC closes below 56k today, then it is most likely going to move lower still, and a bottom will not have been found. Additionally, this would change the chart pattern to negative by confirming a downtrend technically speaking. In other words, if BTC closes below 56.5k, it would be a sell signal for an active swing trader. The markets just seem a little stressed lately. I hope we are not heading for a major surprise in the financial markets. Technical analysis only gets you so far and is mostly used to help one justify the timing of a purchase or sale of a particular holding within your portfolio. I will be watching all the markets closely, but the crypto space will get most of my attention today.

Thanks for reading,