Bitcoin Price Remains Bullish as Monthly Stochastic Ratio Surpasses 80, Here’s Why

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Over the last four weeks, Bitcoin’s price has struggled to break the $100,000 mark, mostly ranges from $90,000 to $100,000. This correction and frail price action have sparked some bearish sentiment among traders, with some speculating that Bitcoin may have already reached its peak in the current cycle.

However, some bull advocates still note that Bitcoin’s price trajectory remains bullish as technical indicators continue to signal upward momentum. Cryptocurrency analyst Tony “The Bull” Severino highlighted a key observation on social media platform X, focusing on Bitcoin’s monthly stochastic indicator to suggest that Bitcoin is bullish is far from exhausted.

A monthly stochastic above 80 signals forceful momentum

The weakening bullish sentiment in Bitcoin has continued over the past 24 hours, and the Crypto Fear And Greed Index currently indicates nervous sentiment among cryptocurrency market participants. However, according to technical analysis, this lack of greed/bullish sentiment does not necessarily translate into an impending decline in Bitcoin’s price.

Cryptocurrency analyst Tony Severino pointed out that Bitcoin’s monthly stochastic oscillator, which is a tool used to measure market dynamics, is still above the 80 level indicating bullish momentum. This indicates forceful upward momentum, as stochastic persistence above this threshold has historically coincided with significant price increases.

Interestingly, history shows that holding Bitcoin above the 80 level on the stochastic oscillator has always led to continued price increases. This trend is evident during the bull runs of 2017, 2020, and January 2024, during which Bitcoin bounced higher to the 80 level multiple times and underwent significant upward moves each time. Therefore, the current ability to maintain this level shows that Bitcoin the upward trend is still on track even after recent market fluctuations.

Source: X

Doji candlestick patterns support the continuation of Bitcoin prices

Another key observation from Severino’s analysis is the repeated occurrence of doji candlesticks on the Bitcoin price chart while defending the 80 level on the stochastic indicator. The 2017, 2020 and 2024 retests were highlighted by the formation of a doji candle during this period. It is worth noting that these doji candlesticks formed on the monthly candlestick time frame, revealing indecision stretching for several weeks, much like the current price action.

In the current situation, Bitcoin’s price action between the $90,000 and $100,000 levels has led to the emergence of a doji on a monthly time horizon to complement the prospect of a price rebound on the stochastic indicator. The indecision reflected in this doji candlestick suggests that Bitcoin has yet to make a final move, and the options are either a significant break above $100,000 or drop below $90,000.

At the time of writing, Bitcoin is trading at $97,000 and has increased by 2% in 24 hours. In the previous technical analysis, Tony Severino highlighted $178,000 as a potential price target for Bitcoin.

Bitcoin price chart from Tradingview.com
BTC price is trying to create support at $97,000 | Source: BTCUSD on Tradingview.com

Featured image created with Dall.E, chart from Tradingview.com

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