Bitcoin (BTC) is hanging on to the $58,000 critical support despite overwhelmingly negative sentiment. A dip to $56,200 on Thursday was bought back up, and Friday has seen the $BTC price climb above support once more. Will it hold?
Bitcoin is still down at that crucial level of $58,000. Many investors and traders are no doubt wondering if $BTC is going to approach the cliff edge once again, and if it does, will it finally take that feared plunge, which could take it into an early bear market?
However, from the perspective of fundamental as well as technical analysis, this would seem an extremely unlikely proposition.
A fundamental perspective
The fundamentals state that Bitcoin is one of the scarcest assets on the planet. It is far scarcer than gold, and if you compare it with the dollar, it is up hundreds of thousands of percent, and the U.S. government (and all other countries) have hardly even begun all the money printing yet, that will need to take place in order to be able to roll over the insane piles of debt.
Fiat currency is nothing more than paper when it comes down to it. It only has value if the government behind it remains solvent. Even the silver coins that were issued to the legionnaires at the end of the Roman empire had some silver still in them. What value remains in fiat currency?
The world is moving through times never before experienced by those living in them. These are times where real wealth in hard assets is what is sought after. Where fiat currencies are concerned, the curtains are parted, and everyone can see that the emperor has no clothes on.
A time of reckoning is here. If you have ‘money’ (stable store of value?) in the bank, all the ridiculous amounts of printing that governments are about to do, will come cascading into the system, heavily diluting the fiat currency that is already owned, and as a result, your ‘money’ in the bank will be worth far less.
The technical perspective
From a technical perspective, things aren’t as clear cut. Markets go up, and they go down. Nothing just goes up in a straight line, at least not over the short to medium term.
Source: TradingView
The $BTC price has been steadily making lower highs and lower lows over quite some period of time now, which for many, could be seen as a cause for concern. However, as well as being a negative pattern, this is also how a bull flag forms, and this is an incredibly bullish pattern.
In the daily chart above, it can be seen how the $BTC price is battling to stay above the support at $58,000. If it is rejected here, it can go a lot lower. That said, an inverse head and shoulders pattern looks to be forming. Even if the price does come down more, it would still lend itself to a further formation of that right shoulder. This could be a bullish reversal.
A choice needs to be made
The Bitcoin bull market is still intact. The crazy run up from $25,000 to $73,000 is still being absorbed by the market. The price can continue to go sideways and even further down, but at the end of the day, this is Bitcoin. Would you rather sell your $BTC and buy paper currency with it, or will you hold, and take part in the future financial system? Your choice.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
