Bitcoin Poised to Conquer $31,000 Resistance
Another week has ticked by with Bitcoin lingering on the threshold of a swift route to $36,000 and beyond. It is knocking on this resistance door for the second time, and with additional momentum fueling its efforts, Bitcoin seems ready to break the barrier.
The term “more in the tank” alludes to the fact that momentum is currently in Bitcoin’s favor. The last time Bitcoin clashed with the $31,000 barrier, it was after a leap from $20,000, and momentum had fizzled out by the time it reached this crucial point.
Momentum Indicators Rise for Bitcoin
At present, Bitcoin is resting at this resistance, marking time before potentially breaking through. When viewed through the broader lens of the weekly Stochastic RSI (a momentum indicator), Bitcoin is making its way up towards the halfway mark – an overwhelmingly bullish sign.
Examining lower time frames, both the 8-hour and 12-hour charts reveal that Bitcoin has bottomed out and is on an upward trajectory, even as the daily time frame exhibits a downward trend.
Rewind to April when Bitcoin was hovering around these levels; all time frames were in the overbought zone, resulting in Bitcoin retracting after hitting resistance.
A further glimmer of hope is Bitcoin’s breakthrough at the top of the bull flag pattern it formed following the April rejection. Although it has not skyrocketed immediately, Bitcoin has resumed its sideways movement after dipping back into the flag.
Bitcoin: A Unique Asset in Times of Risk
Bitcoin may just be biding its time, awaiting the spark of bullish news that could shatter the stagnancy and send it soaring. Despite little alteration in traditional finance, the looming threat of a severe recession remains a dark cloud on the horizon.
Some analysts suggest that in a drastic market crash, Bitcoin could be the first to plummet dramatically as investors shed their risk assets.
However, one could counter-argue that Bitcoin, being the scarcest asset globally and least correlated with traditional financial system assets, would hold exceptional value. Amid potential economic chaos and government resorting to money printing to keep everything afloat, Bitcoin could emerge as an extraordinarily valuable asset indeed.
