Managing Editor’s Note: According to tech investing legend Jeff Brown, the next big AI opportunity is here, but most people will miss out because they don’t know about “the million-dollar cycle.”
According to Jeff, the last four times this happened, folks who knew what to do could have turned $1,000 into $1 million or more.
That’s why, this coming Wednesday, October 14, at 8 p.m. ET, Jeff is having a special strategy session to give you all the details. You can save your seat for his strategy session with one click here.
Bitcoin has rallied more than 40% since June. But the cryptocurrency is now showing warning signs that this run is getting tired.
That rally came despite a setback in Washington. Last month, the Senate failed to advance the CLARITY Act, a bill that would have set federal rules for crypto markets.
Now fears about government debt and borrowing, along with recent intervention in the Treasury market, are acting as tailwinds for assets favored for their scarcity value.
But several chart signals are hinting at potential trouble.
So today, let’s dig into why Bitcoin’s current rally is looking stretched and ready to reverse…
It happens about every four years (not elections)... and every single time, without exception… It has created some of the biggest millionaire making opportunities in history. It’s happening again by the end of this month. Which is why Jeff Brown will give you all the details this coming Wednesday, October 14, at 8 p.m. ET. Click here to automatically save your seat for The October Million-Dollar Cycle.
That’s when billions of dollars could begin moving into one overlooked corner of the AI boom. As that money moves, Larry Benedict believes it could create your next chance to profit. Get the ticker he is watching before December 9.
Bitcoin peaked near $125,000 a year ago. Then it fell 53%.
The decline brought Bitcoin back to a key congestion zone that it has tested numerous times since 2024.
Take a look at the long-term Bitcoin chart below.
The $60,000 level has become a “make-or-break” level (shown with the shaded box). It has been a major support level extending back several years.
Bitcoin’s decline from last year’s peak brought it back to that level in February. That sparked a rally that eventually fizzled out.
Another test of support in June set the springboard for the current rally. Bitcoin fell back to the support zone again at “1.” A second test at “2” produced a lower low in price. But the Relative Strength Index (RSI) had a higher low at the same time. That positive divergence showed downside momentum was fading.
Bitcoin has rallied over 40% since then. But now it’s hitting a resistance level while another RSI divergence is forming.
Altogether, it suggests this current rally could be running out of steam. Here are the chart developments to monitor for Bitcoin’s next move…
Bitcoin staged an impressive rally off the test of $60,000 back in June. But the upside is losing momentum and a mean reversion could set in.
Take another look at the Bitcoin chart:
Bitcoin’s recent gains pushed it nearly 10% above its 50-day moving average (MA – blue line). That’s a significant stretch.
Bitcoin also faces price resistance at the $90,000 level. That was a breakdown point from a bearish flag pattern at the start of the year. The pattern occurs when Bitcoin trades inside a channel against the prevailing trend, which ultimately leads to new lows.
Another RSI divergence is showing up as well, except this time it’s negative. While Bitcoin made a higher high in price from “1” to “2,” the RSI is making a lower high. That shows fading momentum on the recent gains.
The weight of the chart evidence suggests that Bitcoin’s quick rally off the June lows is running out of steam. At a minimum, I wouldn’t be surprised to see Bitcoin pull back to test the 50-day MA near the $75,000 level.
As traders, we’ll stay on the lookout for opportunities as Bitcoin faces its next major moves…
Regards,
Larry Benedict
Editor, Trading With Larry Benedict
Reading Trading With Larry Benedict will allow you to take a look into the mind of one of the market’s greatest traders. You’ll be able to recognize and take advantage of trends in the market in no time.
