Bitcoin (BTC) Holds Steady Amid Major US Trade Deals: What’s Next?
Recent trade deals, first with Japan, and then with the EU, have contributed to positive investor sentiment in the US. With the U.S. stock market flying high, Bitcoin is consolidating near the top of a bull flag. A breakout is potentially not far away.
S&P 500 Index reenters ascending channel
Source: TradingView
The Trump trade tariffs shock sent the S&P 500 Index barrelling out of the ascending channel in early March of this year. After a 21% reversal, who would have thought that only five months later the price would have reentered the channel.
With the two huge recent trade deals brokered with Japan and the EU, the US stock market has increased certainty going into the future, bringing music to the ears of institutional investors.
Looking at the above weekly chart, things look extremely bullish as long as this week’s candle is able to close above the lower trendline. The RSI at the bottom of the chart is showing that there is room to run before the Index starts to become overbought.
Rejection at the top of the $BTC bull flag?
Source: TradingView
The 4-hour chart for $BTC shows that the price hit the upper trendline of the bull flag, and candle wicks stopped just short of the 0.618 Fibonacci extension line, which also happens to coincide with the $120,000 horizontal resistance. Therefore, this is an ideal place for the bulls to take a break while the bears try to reverse the price from here.
The turn-down of the indicators in the Stochastic RSI are further evidence that some kind of correction could now take place. There is still the possibility of another breakout attempt from the bulls, but it is looking more likely that the price is going to meander down at least to the $118,000 horizontal support level. If this breaks down, there is potential for the bull flag to extend further sideways as the price heads back down to the bottom again.
How deep could this potential correction go?
Source: TradingView
The daily chart view for $BTC reveals that $117,000 is where the candle bodies rest for this bull flag. This perhaps gives the price more leeway to come down a bit further, although, as can be seen by previous long candle wicks to the downside, there is the possibility of a deeper correction to the bottom of the flag, and perhaps even a wick all the way down to retest the support at $112,000.
The Stochastic RSI on the daily time frame has now flipped back to the upside, promising a more sustained period of positive price momentum. However, the RSI, at the very bottom of the chart, shows that the indicator is currently rejecting from the downward sloping trendline. This trendline will need to be broken for the $BTC price to continue going up.
Weekly cross-down of Stochastic RSI indicators
Source: TradingView
The weekly chart reveals that all is looking good as regards price action. That said, it could be that another dip to the bottom of the small bull flag might coincide with a cross down of the indicators for the Stochastic RSI. The real test will be whether these indicators are able to bounce again from the area of 80.00. The fact that the 2-week, and monthly Stochastic RSI indicators are angled upward lends credence to this possibility.
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source : https://cryptodaily.co.uk