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Everyone interested in cryptocurrencies, whether professional or amateur investors, is eagerly watching as the world's most famous cryptocurrency is on the verge of a potentially historic breakthrough. According Well-known YouTuber Steve from crypto Crew Universitybitcoin is currently challenging a crucial Fibonacci level, and if it successfully holds above this level, it could only be a matter of time before it hits a new all-time high.
The Fibonacci phenomenon
The Fibonacci retracement tool is a popular technical analysis tool used by traders to identify possible support and resistance levels. By drawing a Fibonacci retracement from the high to low of a price chart, traders can identify significant levels at which the market can pause or reverse.
In the case of bitcoin, the cryptocurrency is fighting a specific Fibonacci level that has historically signaled the start of a major bullish phase. According to Steve, every time bitcoin has surpassed this level in previous cycles, it has been about a month or two away from reaching a new all-time high.
The RSI connection
Adding another layer to the analysis, Steve also talks about another strong indicator: the Relative Strength Index (RSI). The RSI is a momentum oscillator that measures the speed and change of price movements. On the monthly chart, bitcoin's RSI sits just below 70, a key level that indicates whether an asset is overbought or oversold.
The intriguing part of the analysis is the correlation between Fibonacci levels and the RSI. When bitcoin price action on Fibonacci retracement lines up with specific RSI levels, it has historically signaled major market moves. The current scenario suggests that bitcoin is at a critical juncture, with the potential to embark on a legendary rally if it surpasses the Fibonacci level and holds it as support.
Historical patterns and future possibilities
The analysis delves into historical patterns, noting that in previous cycles, once bitcoin surpassed the 38% Fibonacci retracement level, it entered what is known as Phase 1, where the 38% level acted as support. Following this, in Phase 2, bitcoin would test the 78% Fibonacci level, which is currently the focus.
An interesting observation is the repetition of a 6% rally above the Fibonacci level before a rejection, as seen in the 2015 and 2019 cycles. This pattern suggests that if bitcoin can sustain a breakout above the current level of Fibonacci, could be on track to enter Phase 3, which would be marked by holding support at this level and potentially setting the stage for a new all-time high.
The 1,000 day cycle
A particularly notable aspect of the analysis is the 1,000-day cycle observed in bitcoin market behavior. In previous cycles, it took approximately 1,000 days from the time bitcoin broke through a certain RSI channel until it held support above the corresponding Fibonacci level, marking the start of a new bullish phase. If this pattern holds, bitcoin could be primed for a significant move in the coming months.
Where do we go from here?
As bitcoin teeters on the brink of a critical Fibonacci level, everyone interested in cryptocurrencies is watching with bated breath.
The convergence of Fibonacci and RSI retracement levels, along with historical patterns, suggests that bitcoin could be on the verge of a big move. It remains to be seen whether this will translate into a new all-time high, but caution is warranted as a significant correction could occur in the short term. Steve's analysis makes a compelling case that at some point in the not-too-distant future, bitcoin will launch into the third and final explosive phase of its bull market cycle.
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