In the past week, the price of Bitcoin was on a strong upward trend and is currently testing the resistance level at 34,655.00, which is a 61.8% Fibonacci retracement.
Investor hopes for the imminent approval of the first exchange-traded fund (ETF) for Bitcoin have contributed to the current uptrend in Bitcoin’s price.
In August last year, the court ruled that the U.S. Securities and Exchange Commission (SEC) did not have the right to prevent Grayscale Investments from converting its GBTC fund into a BTC ETF, and the U.S. Appeals Court officially approved the need to reconsider the regulatory agency’s decision.
This has boosted confidence in the Crypto market, with the impending launch of a new cryptocurrency product for institutional investors before the end of the current year, as reports indicate that BlackRock’s iShares Bitcoin Trust Bitcoin ETF has appeared on the list of products supported by the Depository Trust Company (DTCC).
In my view, the giant investment firm BlackRock is one of the most important and prominent high-liquidity companies, which will help inject liquidity into the Crypto market, leading to a potential price increase.
Despite the positive fundamentals, the increase in Bitcoin prices has now slowed down in anticipation of new decisions by the Federal Reserve regarding monetary policy. It is expected that the Federal Reserve will either keep interest rates steady, supporting Crypto assets, or raise them, which could lead to a correction in the BTC/USD pair.
I also see the price of Bitcoin, which is heading towards $35,000, has sparked optimism among investors after significant gains from the recent uptrend. After a 35% increase in value over the past six weeks, Bitcoin is currently trading at $34,747.
In my opinion, this is a significant development for the cryptocurrency, as it has led to the highest weekly closing since April 2022, spanning 78 weeks, especially with the monthly close approaching today.
It seems to me that Bitcoin has started to exhibit a historical price pattern that has repeated many times since the beginning of 2023. Currently, the Relative Strength Index (RSI) is in the overbought zone above the 70.0 level.
This is typically followed by a period of sideways or corrective downward movement that lasts for about 55 days. After these 55 days, during which the RSI drops to 30.0 or lower, reaching the oversold zone, the price rises strongly.
Therefore, considering this 55-day pattern, we can potentially identify the next buying signal around December 19. The condition is that the RSI should be below the 30.0 level, indicating an ideal time to buy Bitcoin, which is likely to occur. I believe the primary support for this pattern will be around $28,000, from which a strong upward rebound may occur.