Bitcoin hits resistance, but next big wave is coming

The Bitcoin price has met with strong resistance at the $99,000 horizontal level and there may well be some kind of correction from here. That said, there is a potential tidal wave building. When might it hit?

ETFs experience big outflow on Thursday

On the face of things, the crypto market across the board is still showing a fairly depressed sentiment. The U.S. Spot Bitcoin ETFs are still seeing net outflows, with Thursdays outflow on a much larger scale than hitherto. A total of 3.78K BTC were sold out of the ETFs, with Blackrocks IBIT fund for once leading the selling with a 1.16K BTC outflow.

A sharp short-term price fall?

A Forbes article on Thursday carried a warning from analysts at JP Morgan that Bitcoin and Ethereum prices could fall sharply in the short term. Giving the reason as institutional demand weakness the analysts were quoted as saying that this was caused by:

demand weakness by those institutional investors that use regulated CME futures contracts to gain exposure into these two cryptocurrencies,

If the Bitcoin price does fall in the short term it will probably just be par for the course. There could even be a black swan event, given the shaky situation in current war zones, or in one of the big world economies. This could lead to a Bitcoin sell-off as investors sought to sell their most liquid assets first.

Nevertheless, once the dust settled, the realisation that Bitcoin is the scarcest monetary asset on the planet would likely lead to a resumption of the bull market.

Bitcoin facing possible rejection at $99,000

Source: TradingView

The 4-hour chart for the $BTC price shows how the price has come up against the $99,000 resistance and how it looks as if it may be rejected. This horizontal level also corresponds perfectly with the 0.5 Fibonacci level, so it would make sense to see a rejection here.

The Stochastic RSI on this time frame is showing an overbought condition, and this is also the case on the 8, and 12-hour time frames.

Given that open interest has increased by more than $2 billion in the last 24 hours, with leveraged long positions looking to cash in on this current rally, there is the possibility that the price could still move higher from here. It may be said though, that as this move is starting to run out of steam, this is probably a very high risk strategy.

Weekly Stochastic RSI in oversold condition

Source: TradingView

The weekly chart for Bitcoin shows how important the current resistance level is. Only two full candle bodies have managed to close above this particular resistance so far, and this gives an idea of its strength. Of course, there is the more important range resistance at $106,000, but one step at a time is the best course to take.

While the short-term Stochastic RSI indicators are all coming to their overbought conditions, the weekly Stochastic RSI, at the bottom of the chart, is almost completely oversold. This indicator generally only makes two peaks each year, so this next one could be extremely important, and has the potential to take Bitcoin to the very top of its bull cycle.

Looking left at the previous movements of this indicator, it can be seen that there was a lot of choppiness from May until September of 2024. This was due to the development of the very long bull flag. Could this happen again from here? Yes, its a possibility, but the main thing to take from this, is that this indicator will eventually get back to its peak, and when this happens, the Bitcoin price will potentially be much higher.

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.

Text source: Crypto Daily™

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