BTC is looking extended. Retrace is likely.
Updated
BTC has had an amazing run these past few months, but it looks like it is near time to retrace. A retracement at this time would be healthy for the continued long term growth of BTC. Here are some factors indicating a retrace is coming soon:
The weekly RSI is currently 88.7 at the time of writing.
The highest ever recorded weekly RSI was 91, which occurred twice over BTC's history, and both times were followed by severe retraces.
The MACD is blown out on both the daily and weekly time frames, and the MACD is currently touching the same height it did in 2017 before the top of the market was reached.
The stochastic RSI has topped out on the daily and is declining, while it is maxed out on the weekly time frame.
The bollinger bands are blown wide open and price will likely look to move to the bottom side of the bands on a retrace.
Looking at the ichimoku cloud, BTC has not touched the Kijun for 74 days now. This is most likely the longest that price has ever remained above the Kijun without coming back down to touch it. Price will eventually have to return to the Kijun to test it and confirm it as support before going much higher.
So, where should we expect BTC to return to? A healthy retrace would be to the 2017 ATH, which is around $19,450. This would allow for RSI to cool off, MACD to return to bottom, bollinger bands to contract afterwards, and a touch off the Kijun.
Of course, nobody can say for sure what BTC is going to do as it has defied everyone's expectations. I continue to be long term bullish. However, for now, I think BTC needs to let off the gas and have a healthy correction.
We know that institutions (such as Grayscale) are buying so much recently, which keeps the liquid supply of BTC low, and price pressure high. And while it is great to see institutions getting involved, BTC making mainstream news, and more of the public getting onboard; a healthy correction now might make for less pain if BTC pushes too high and has an even bigger correction.
When we get a decent correction, don't forget to load up on more coins, and if you're new to the game, don't stress too much, just ride the wave and HODL my brothers and sisters :)
BTCUSD
The weekly RSI is currently 88.7 at the time of writing.
The highest ever recorded weekly RSI was 91, which occurred twice over BTC's history, and both times were followed by severe retraces.
The MACD is blown out on both the daily and weekly time frames, and the MACD is currently touching the same height it did in 2017 before the top of the market was reached.
The stochastic RSI has topped out on the daily and is declining, while it is maxed out on the weekly time frame.
The bollinger bands are blown wide open and price will likely look to move to the bottom side of the bands on a retrace.
Looking at the ichimoku cloud, BTC has not touched the Kijun for 74 days now. This is most likely the longest that price has ever remained above the Kijun without coming back down to touch it. Price will eventually have to return to the Kijun to test it and confirm it as support before going much higher.
So, where should we expect BTC to return to? A healthy retrace would be to the 2017 ATH, which is around $19,450. This would allow for RSI to cool off, MACD to return to bottom, bollinger bands to contract afterwards, and a touch off the Kijun.
Of course, nobody can say for sure what BTC is going to do as it has defied everyone's expectations. I continue to be long term bullish. However, for now, I think BTC needs to let off the gas and have a healthy correction.
We know that institutions (such as Grayscale) are buying so much recently, which keeps the liquid supply of BTC low, and price pressure high. And while it is great to see institutions getting involved, BTC making mainstream news, and more of the public getting onboard; a healthy correction now might make for less pain if BTC pushes too high and has an even bigger correction.
When we get a decent correction, don't forget to load up on more coins, and if you're new to the game, don't stress too much, just ride the wave and HODL my brothers and sisters :)
BTCUSDNote
EDIT: I should note, while I marked this idea as 'Short' I do not recommend shorting BTC here. I simply think it is likely to go down in price in the near future.
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