Bitcoin’s Bullish Momentum Slows as Sideways Chop Continues | US Dollar (DXY) Surges

Daily

Bitcoin’s bullish momentum has begun to slow over the past week as price remains consistent. Currently, Bitcoin is trading at roughly $7.7k as $8k serves as temporary resistance. Bitcoin’s daily sequential indicator is on a red 1 which is considered neutral territory. Volume is decreasing and the bulls are pulling back from their previous high of roughly $8.3k. If price increases past $8.3k, look to take a bullish swing trade to $9k.

4 Hour

Bitcoin just flipped to a green 1 candle and is still in a neutral-bearish posture on the 4 hour. As of late, price has been respecting the sequential setup trend lines. A break above the green trend line at $8.3k could catapult Bitcoin higher to $9k, but the way the current trend has been behaving it appears unlikely that price will reach $8.3k before a pullback. In effect, Bitcoin will be in serious trouble if price falls below the red setup trend line at $7.2k. A break outside either of these setup trend lines has the ability to dictate the momentum of the macro trend in the coming 6 months.

Weekly

The weekly chart is no longer bullish. Bitcoin is on a green 7 of 9 candle which means bullish momentum is running out. In a previous article, we asserted that a green 7 is characteristically bullish, therefore, we expect 1.5 more weeks of upside before a potential trend reversal. While a green 7 is characteristically bullish, the candle needs to close above the previous green 6 candle. Bitcoin still has a few days left to close above the previous green 6, but if it doesn’t the trend will likely top. Previously, we mentioned that Bitcoin’s bullish trend could take us to $9k. Subsequently, if $9.4k is broken we could record new highs. This scenario is still possible, however, the longer price remains at $7.7k, the more likely it is that interest will decline and a 30-40% pullback will follow.

US Dollar Strengthens (DXY)

The US Dollar continues to increase in value relative to other currencies. During Bitcoin’s massive run in late 2017 the dollar’s value fell drastically. Now the dollar is strengthening which doesn’t make it easy for Bitcoin.

Cryptocurrency Data

DataLight tweeted an interesting graphic above which displays the ROI of the top cryptocurrencies since their listing price. Overall, this graphic serves as a testament for Bitcoin maximalists. No other cryptocurrency has ever had a larger ROI than Bitcoin. Also, the fake Bitcoins (Bitcoin Cash & Bitcoin SV) are trading below their exchange listing price. Additionally, the majority of the Altcoins on this chart are equivocal to inflationary fiat currencies. There are no technicals in the code which prevent Ripple labs from creating more XRP and the same is true for Stellar. These cryptocurrencies don’t have any of the attractive properties included in the Bitcoin code such as scarcity, censorship resistance, and immutability. Ultimately, they are a distraction created by opportunists who have printed their own money which now qualify as unregistered securities. The fact that the XRP ‘army of the brain dead’ still exists in mass on crypto twitter is a signal that crypto has a long way to go before investors truly understand what they are buying. Above all, speculation is not a use case.

Conclusion

Bitcoin’s bullish momentum has begun to slow over the past week as price remains consistent. If price increases past $8.3k, look for a bullish swing trade to $9k. If Bitcoin breaks below $7.2k support, expect a gradual pullback to the $4.5k-$5.5k level. However, a hypothetical flash crash which barely touches $7.2k does not qualify because price action could easily regain its loses. In order for price to decrease to the $5k level, the decline to $7.2k has to be gradual in order to instill fear in the minds of people who fomo’d into the market at $7k-$8k.

Disclaimer: I am not a financial advisor. Nothing in this article should be taken as financial advice. Please do your own research and make objective decisions. The author of the article owns Bitcoin.