BTC - Is this rally sustainable and what to expect?
In the past two days, Bitcoin has experienced an impressive surge in price, exploding from around 85k to over 94k, showing strong bullish momentum. This rapid movement has certainly caught the attention of many traders and investors. However, while the price action has broken through previous lower highs, signaling a potential shift in market sentiment, it's crucial to approach this rally with caution.
Although the recent price increase indicates that bullish momentum is in play, it's important not to overlook the possibility of a short-term pullback or consolidation. The market has shown volatility before, and while breaking the lower-high structure is a positive sign, it doesn’t necessarily guarantee sustained upward movement.
In this analysis, I will dive deeper into the current price action and what it means for BTC short-term outlook. We’ll explore the factors to watch in the coming days and the potential risks that could challenge the bullish trend.
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What will we discuss:
- Golden Pocket fibonaccy with resistance
- Point of Control
- Stochastic RSI
- The deathcrosses
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Golden Pocket fibonaccy with resistance
The golden pocket Fibonacci zone (0.618–0.65), measured from the highs to the lows on the higher timeframe, is located between 96,450 and 97,580. This area aligns with a key resistance level that previously triggered a strong move down in BTC. The golden pocket often acts as a strong rejection zone, and bears are likely to try defending this level again. So be careful on how price will move into this level and how it reacts.
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Point of control (POC)
The Point of Control (POC) for the entire trading range from November to the present is located precisely at 96,450. This level is particularly significant as it aligns with multiple technical factors, creating a strong confluence zone. Not only does it coincide with a well-established resistance area that previously initiated a sharp move to the downside, but it also sits within the golden pocket Fibonacci.
The POC marks the price level where the highest volume of trading activity has occurred during this entire range, indicating a strong area of interest for both buyers and sellers. High-volume nodes like this often act as magnets for price and tend to offer either strong support or resistance depending on the context. In this case, with the POC positioned within a broader resistance zone, it becomes an even more formidable barrier.
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Stochastic RSI
The Stochastic RSI on the daily timeframe is currently in the overbought zone, where it has remained for approximately 10 consecutive days. This prolonged stay in overbought territory suggests that bullish momentum may be weakening and the indicator is beginning to show signs of exhaustion.
Typically, when the Stochastic RSI hovers in this upper range for an extended period without a meaningful pullback, it signals that a reversal or at least a slowdown in the prevailing trend could be imminent. The oscillator appears to be running out of steam, and barring a sudden surge in buying pressure, it is likely to start curling downward in the coming days or within the next week.
This could imply a shortterm correction is luring.
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Deathcrosses this cycle
A deathcross is a bearish technical indicator (lagging) that occurs when a shorter-term (50-day MA) crosses below the longer-term (200-day MA).
Deathcross 1
At the time of the first death cross, the price of BTC had already formed a local low before the crossover occurred. Following the death cross, BTC experienced what is commonly referred to as a "death cross rally" — a counterintuitive move where price rallies shortly after the bearish signal.
This rally was significant, as it broke short-term market structure to the upside and eventually found support at the 50-day MA, the same level that previously acted as resistance. That support held, even during a brief rejection, and marked a key shift in momentum.
From there, BTC continued its upward move and eventually went on to make new highs, effectively invalidating the immediate bearish expectations typically associated with a death cross.
Deathcross 2
The second death cross in this cycle occurred after Bitcoin had already established a local low and began moving back upward toward the death cross. Initially, BTC struggled to break above the 50-day MA, but it eventually managed to push through.
However, this time, during the subsequent correction, Bitcoin was unable to hold the 50-day MA as support. Instead, it formed a higher low, indicating a shift in market dynamics and suggesting that the selling pressure may have been weakening. This higher low marks a crucial point in the price structure, as it hints at potential bullish momentum building, despite the earlier bearish signal from the death cross.
Deathcross 3
This time, the low was established right at the moment of the death cross, and BTC began to move upward immediately after the crossover occurred. After initially struggling to break above the 50-day MA, BTC surged higher and managed to surpass both the 50-day and 200-day MA.
Currently, BTC is facing strong resistance at these levels. The question now is whether BTC will correct and find support at the 50-day MA once again, as it did during the first instance, or if it is aiming to form a higher low, similar to the second occurrence.
In both scenarios, Bitcoin has historically experienced a pullback after a few days of upward movement, so a correction at this point would not be surprising.
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Although the recent price increase indicates that bullish momentum is in play, it's important not to overlook the possibility of a short-term pullback or consolidation. The market has shown volatility before, and while breaking the lower-high structure is a positive sign, it doesn’t necessarily guarantee sustained upward movement.
In this analysis, I will dive deeper into the current price action and what it means for BTC short-term outlook. We’ll explore the factors to watch in the coming days and the potential risks that could challenge the bullish trend.
------------------------------------------
What will we discuss:
- Golden Pocket fibonaccy with resistance
- Point of Control
- Stochastic RSI
- The deathcrosses
------------------------------------------
Golden Pocket fibonaccy with resistance
The golden pocket Fibonacci zone (0.618–0.65), measured from the highs to the lows on the higher timeframe, is located between 96,450 and 97,580. This area aligns with a key resistance level that previously triggered a strong move down in BTC. The golden pocket often acts as a strong rejection zone, and bears are likely to try defending this level again. So be careful on how price will move into this level and how it reacts.
------------------------------------------
Point of control (POC)
The Point of Control (POC) for the entire trading range from November to the present is located precisely at 96,450. This level is particularly significant as it aligns with multiple technical factors, creating a strong confluence zone. Not only does it coincide with a well-established resistance area that previously initiated a sharp move to the downside, but it also sits within the golden pocket Fibonacci.
The POC marks the price level where the highest volume of trading activity has occurred during this entire range, indicating a strong area of interest for both buyers and sellers. High-volume nodes like this often act as magnets for price and tend to offer either strong support or resistance depending on the context. In this case, with the POC positioned within a broader resistance zone, it becomes an even more formidable barrier.
------------------------------------------
Stochastic RSI
The Stochastic RSI on the daily timeframe is currently in the overbought zone, where it has remained for approximately 10 consecutive days. This prolonged stay in overbought territory suggests that bullish momentum may be weakening and the indicator is beginning to show signs of exhaustion.
Typically, when the Stochastic RSI hovers in this upper range for an extended period without a meaningful pullback, it signals that a reversal or at least a slowdown in the prevailing trend could be imminent. The oscillator appears to be running out of steam, and barring a sudden surge in buying pressure, it is likely to start curling downward in the coming days or within the next week.
This could imply a shortterm correction is luring.
------------------------------------------
Deathcrosses this cycle
A deathcross is a bearish technical indicator (lagging) that occurs when a shorter-term (50-day MA) crosses below the longer-term (200-day MA).
Deathcross 1
At the time of the first death cross, the price of BTC had already formed a local low before the crossover occurred. Following the death cross, BTC experienced what is commonly referred to as a "death cross rally" — a counterintuitive move where price rallies shortly after the bearish signal.
This rally was significant, as it broke short-term market structure to the upside and eventually found support at the 50-day MA, the same level that previously acted as resistance. That support held, even during a brief rejection, and marked a key shift in momentum.
From there, BTC continued its upward move and eventually went on to make new highs, effectively invalidating the immediate bearish expectations typically associated with a death cross.
Deathcross 2
The second death cross in this cycle occurred after Bitcoin had already established a local low and began moving back upward toward the death cross. Initially, BTC struggled to break above the 50-day MA, but it eventually managed to push through.
However, this time, during the subsequent correction, Bitcoin was unable to hold the 50-day MA as support. Instead, it formed a higher low, indicating a shift in market dynamics and suggesting that the selling pressure may have been weakening. This higher low marks a crucial point in the price structure, as it hints at potential bullish momentum building, despite the earlier bearish signal from the death cross.
Deathcross 3
This time, the low was established right at the moment of the death cross, and BTC began to move upward immediately after the crossover occurred. After initially struggling to break above the 50-day MA, BTC surged higher and managed to surpass both the 50-day and 200-day MA.
Currently, BTC is facing strong resistance at these levels. The question now is whether BTC will correct and find support at the 50-day MA once again, as it did during the first instance, or if it is aiming to form a higher low, similar to the second occurrence.
In both scenarios, Bitcoin has historically experienced a pullback after a few days of upward movement, so a correction at this point would not be surprising.
------------------------------------------
Thanks for your support.
- Make sure to follow me so you don't miss out on the next analysis!
- Drop a like and leave a comment!
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Free discord trading community
discord.gg/ctYsFQR4bx
Free signals
t.me/codeandcandle
discord.gg/ctYsFQR4bx
Free signals
t.me/codeandcandle
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.