Bitcoin Update - Bullish long-term trend reestablised

 October 30, 2024, Technical Analysis Update: Bitcoin (BTC-USD)

Overview: Bitcoin continues to show strength as it makes higher highs and lower lows on the daily chart. Furthermore, it just broke out of its downward trending trading channel that it has been stuck in since March.

Technical Analysis:

1. Price Action and Trends:

   • Current Price: At 10am MST on October 30, 2024, Bitcoin is trading at 72,047, up 20% in the last 30 days. Bitcoin was right around 60,000 on Oct. 1st, 2024.

   • Trend Analysis: Bitcoin has been trading within a descending channel since March of this year. This breakout above the top of the channel suggests a bullish trend reversal. The volatility will continue through the end of the year offering buying opportunities at support levels.

2. Support and Resistance Levels:

   • Support: Key support levels have been identified around 71,000 then 70,000, then 68,300. The 66,700 level is critical for BTC. It needs to stay above this level to maintain the current bullish momentum.

   • Resistance: Notable resistance levels are at the ATH set in March at 73,800. Breaking through this level would signal further upward movement, potentially targeting 80,000.

3. Indicators:

   • Moving Averages (MA): On Oct. 27th. The 50-day MA crossed above the 200-day MA, a classic bullish indicator. This crossover, known as a "golden cross," has historically preceded significant upward movements.

   • Relative Strength Index (RSI): The RSI currently hovers around 67, indicating the market might be slightly overbought, but has a little room to run, IMHO. However, this combined with strong overhead resistance could suggest a possible correction or consolidation phase before any further ascent.

   • MACD: The MACD has shown a positive crossover, aligning with the ongoing bullish sentiment.

4. Market Sentiment:

   • Fear and Greed Index: This is a new index and should be taken with a grain of salt. The current reading of 77 indicates that Bitcoin has just entered the greedy stage. Anything above 75 reflects a high degree of optimism. This indicates a market ripe for both buying and selling opportunities, depending on short-term moves.

   • Social Media Sentiment Analysis: There has been a notable increase in positive sentiment, especially following recent tech integrations and adoption news, which could fuel further growth.

5. On-chain Metrics:

   • Active Addresses: An uptick in active addresses suggests growing network activity, potentially supporting price through increased utility and speculative interest.

   • Exchange Reserves: A decrease in Bitcoin reserves on exchanges might indicate a move towards holding or transferring to cold storage, often a bullish sign for longer-term price appreciation.

Strategic Recommendations:

• Long-Term Holders: Continue holding as fundamentals remain strong. Consider accumulating on dips to support levels.

• Traders: Watch for breakout confirmations above resistance or breakdowns below support to enter or exit positions. Volatility could offer profitable trading opportunities.

• Risk Management: Given the RSI's indication, and the strong overhead resistance at 73,800, one could use a strict stop-loss strategy to protect against sudden downturns.

Conclusion: Bitcoin's technicals present a bullish outlook. While short-term corrections are anticipated, the long-term trend favors the bulls. As always, we recommend aligning your investment strategies with both your risk tolerance and investment horizon.

We are here to discuss any specific concerns or investment strategies you might want to explore regarding Bitcoin or any other assets in your portfolio. Please feel free to reach out for a personalized consultation and to read more blog articles at www.smladvisory.com.

Warm regards,

Shawn Loddy

Note: This analysis is for informational purposes and does not constitute investment advice. Always conduct your own research or consult with a financial advisor before making investment decisions. If you would like to discuss anything mentioned in this letter, please reach out to me at shawn@smladvisory.com