Bitcoin’s long-term trajectory remains bullish, especially in light of the increasing U.S. government debt and resulting inflationary pressures. However, analyst Josh of Crypto brought to attention a new warning signal on the Bitcoin chart. Bitcoin just confirmed a bearish signal, while Ethereum is facing rejection from a crucial resistance level.
The US government debt has reached a record high of $35 trillion. This increase in debt leads to more currency being created, which can devalue the US Dollar and result in inflation. Bitcoin, with its fixed supply, can benefit from this situation as its value may rise in response to the increasing US Dollar supply.
On the flip side, the Bitcoin chart still shows a bullish trend on larger time frames. However, in the short term, Bitcoin is struggling to break past the resistance level of $68.3k. We need a daily candle close above this level to confirm a breakout. Additionally, there is significant resistance between $72k and $74k. On the downside, Bitcoin has strong support between $63k and $64k.
Bearish Divergence on the 8-Hour Chart
The 8-hour Bitcoin chart recently confirmed a new bearish divergence. This divergence, characterized by higher highs in price and lower highs in the RSI, suggests a potential short-term pullback. The last bearish divergence on this chart resulted in a short-term pullback before the bullish trend resumed. While this signal alone doesn’t confirm a trend reversal, it indicates that a break or cool-off from recent bullish price action might be imminent.
Key Price Levels and Liquidity Zones
The Bitcoin liquidation heat map reveals significant liquidity at $70.3k to $70.4k, with over a billion dollars worth of short positions that could be liquidated if Bitcoin surpasses $70.4k. On the downside, there’s considerable liquidity around $63.4k to $63.5k. These levels are essential to watch as they can influence Bitcoin’s short-term price movements.
