Weekly Update: Bitcoin Looking Bearish
Good evening, and welcome to this week’s edition of Stealth Trades!
Bitcoin showed a lot of strength at the end of last year.
The cryptocurrency doubled between September and December on the back of President Trump’s newly adopted pro-crypto stance.
But the momentum has run out. And to me, it looks like it is about to roll over…
Above is a daily chart of Bitcoin. Notice the clear head and shoulders pattern that has formed over the last five weeks.
The white arches on the chart mark the head (middle) and shoulders (outsides) of the pattern.
The white horizontal line is the “neckline.” Typically, when price breaks below this level… look out below.
I believe the BTC pump was based largely on hopes of Trump building a federal strategic Bitcoin reserve. This would mean massive buying with federal dollars that is all but guaranteed to push the price higher.
I’m not one to count Trump out. But this seems like a lesser pet project or off-the-cuff interview remark more than a thought-out plan.
Trump has a lot to get accomplished in D.C. I don’t see this being something to waste political capital on – especially with so much focus on DOGE and efforts to cut government spending. This would be a move in the opposite direction.
Anything could happen, of course. But this looks like a short-term top in Bitcoin to me.
Best wishes for your trading,
