With a 28% surge in October many are expecting bitcoin to continue on higher. Alternatively, is this time for bitcoin to retrace to $30,000?
A top, or higher still?
After an exhilarating move over the last couple of weeks, bitcoin has met resistance and is also at the top of a channel it has been following since mid 2022.
Source: Trading View
Would it make sense here for the price to retrace to $30,000 where the 0.618 fibonacci can be found? Below this is the massive support of the 200-day moving average which is currently aligning with the 0.786 fibonacci.
Momentum still strong
It must be noted though that momentum is still strong for bitcoin. Short term Stochastic RSIs are at the bottom, the daily is coming down, and the weekly and 2-weekly are still heading upwards. More importantly, the monthly Stochastic RSI has flipped back to the upside on the monthly close, which should provide strong momentum going forward.
Source: Trading View
Up more likely, but caution advised
As can be seen in the shorter term chart above, bitcoin is still traversing sideways in the pennant it has been in since 24 October. Given that the trend is very much still up, it has to be respected, and therefore it would be more likely for the price to break up out of the flag instead of downwards.
That being said, a retrace to $30,000 could still be healthy and would help to reset the daily stochastic RSI. It should also be taken into account by traders that a much deeper downside move can still happen, which could test the base that bitcoin built at under $20,000, and as long as a new low is not made, the bull market price structure would still not be broken.
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.
