After reaching a new all-time high of more than $61,200 per coin last weekend, Bitcoin is currently trading around $59,000.
After a large bounce off a low of $45,260, Bitcoin cleared the lower level we indicated in our last Bitcoin analysis: $53,000 to $56,000, which we used to trim our position. We stated the next level to watch is $70,000/$80,000 and we continue to believe that Bitcoin will make a local top.
After recent price action, my target is now $65,000/$75,000 before we potentially see a larger drawdown. We will continue to hold our position as long-term it will trade higher but we think there is an opportunity where we see Bitcoin trade at lower levels in the near future.
Below we look at what might be next for the world’s most popular cryptocurrency.
Levels to Watch
Bitcoin is now approaching our upside targets for the end of this larger 3rd wave, which is on the chart in blue. Several cues are pointing to this region, with a focus on $65,000, $75,000 and $107,000.
However, the internal momentum is weakening, which suggests that the lower targets are more probable than breaking the $100,000 region on this uptrend. The RSI may be particularly important. The RSI has respected the upward trend channel since the 3rd wave started in March of 2020. If this breaks to the downside, the 3rd wave is likely over.
Even more concerning is the negative divergences developing in the RSI on the daily chart. As the price makes a higher high, the RSI is making a lower high. This suggests that price is on faulty support at these levels.
Bitcoin is one of our largest holdings in our I/O Fund. We purchased Bitcoin in March 2020 at around $7,750 and sent an alert to our premium subscribers. We alerted premium subscribers for additional entries at around $10,000, $11,000, $12,000, $20,000, and $49,000.
Our deep experience in technical analysis, as well as Beth Kindig’s conviction in her fundamental analysis that institutional investors, economic uncertainty, and mobile payments would push the price higher, gave us the confidence to average up in Bitcoin as the trend continued along our projected path.
