Mish’s Daily: Classic Price Rules the Narrative in Bitcoin

4 weeks ago 135 views 6 min read

Michele “Mish” Schneider

Director of Trading and Education

MarketGauge.com

Mish’s Daily: Classic Price Rules the Narrative in Bitcoin

Written by Michele ‘Mish’ Schneider

The most recent headline and hot off the press

“Rumors of the US Securities and Exchange Commission (SEC) creating a national $BTC reserve spread across the crypto market.”

The article goes on to say that this will trigger a bull run.

And it might.

But the price for now tells a different story, hence, we expect that narrative to change accordingly.

From a strategic perspective, the US having bitcoin as a reserve currency would most likely lead to a US dominance.

There is a new project called BTC Bull, which launched its presale last week with promises of big $BTC rewards for those who bet on $BTC’s future.

Basically, the project will give away free BTC airdrops to token holders when Bitcoin reaches 150k and then at 200k and so on.

Since the presale began, the project has raised $2 million.

Furthermore, Texas and over 15 U.S. states, including Ohio, Kentucky, Pennsylvania, and Georgia, are also considering investing in Bitcoin.

While this trend is commendable, some analysts believe a state-level Bitcoin reserve may not impact BTC’s price.

And that brings me back to price and the narrative.

On the Daily chart, with all the attention and headlines, Bitcoin fell to new multi-week lows.

January 13^th the low was 89,164.

With Bitcoin currently in a warning or caution phase, trading under its 50-day moving average, it is possible the sell-off reverses before hitting that January low.

On the Daily chart, Bitcoin is underperforming the benchmark.

Furthermore, the momentum indicator tells us that the bearish divergence between price and momentum is steepening.

Note how the red dots are now below the 200-DMA (green) while the price remains above.

Should Bitcoin break down under 89k, we refer to the weekly chart.

I love the weekly charts as they help us look out a bit and get a broader perspective.

First, you can see that BTCUSD is far from its major support at the 50-week moving average at about $75k.

While BTC continues to perform on par with the SPY, the real motion indicator shows that the momentum is declining and has a way to go before it is in oversold territory.

As the price declines, the idea is to find a support level to buy with the best risk if wrong. For now, we are standing aside until PRICE tells us what’s next.

Educational purposes only, not official trading advice.

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