Is Bitcoin’s Bullish Momentum Coming to an End? Fairlead Strategies Analysis Suggests Trouble Ahead
Bitcoin’s recent bullish uptrend, which has resulted in a price surge of nearly 300% since November 2022, may be encountering challenges in the near future. Technical analysis conducted by Fairlead Strategies indicates that a pending “stochastics overbought downturn” signal could suggest a weakening of the uptrend and potential price declines.
The stochastics indicator, a widely used momentum oscillator in technical analysis and trading, measures a security’s current market rate in comparison to a range of prices over a specific period. Readings above 80 indicate an overbought condition, and a downturn from this level signals a weakening of the uptrend.
Bitcoin’s 14-month stochastic has dipped below 80, and confirmation of the overbought downturn is anticipated by the end of August. Analysts at Fairlead Strategies have pointed out that if this situation persists through the end of the month, it could signal the conclusion of the cyclical uptrend from the 2022 low, potentially acting as a negative catalyst for Bitcoin’s price.
In addition to the impending stochastics overbought downturn, other indicators such as the MACD and Ichimoku cloud also indicate a challenging environment ahead for Bitcoin’s price. The MACD histogram, which assesses trend strength and changes, is showing smaller bars, while the Ichimoku cloud, a momentum indicator, is flat. These factors contribute to Fairlead Strategies’ analysis that Bitcoin may face difficulties in the future.
Bitcoin’s uptrend has been facing obstacles since March, with the price struggling to establish a firm position above $70,000. This has been represented by the trendline resistance on the monthly chart, adding to the concerns raised by the pending stochastics overbought downturn signal.
As of the time of writing, Bitcoin was trading at $60,660, according to data from CoinDesk.
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