The US ISM manufacturing PMI spiked to an unexpected high of 52.6. This sign of a newly expanding economy could be bullish for Bitcoin as the price potentially finds a bottom. What’s next?
US economic expansion good for Bitcoin
A forecast ISM of 48.5 actually turned out to be a whopping 52.6 on Monday. Anything above 50 means that the economy is expanding rather than contracting. A contracting phase had been in force for more than four years. Tight liquidity had meant falling risk assets, and this had its impact on Bitcoin.
While not necessarily leading to an instant recovery for Bitcoin, the possibility of a rise in the $BTC price may take place as the US economy begins to expand.
Raoul Pal, macro economic expert, posted on X, putting the ISM reading into perspective:
No, the ISM is not everything and it doesn’t mean up only yet necessarily, but it IS a necessary condition for strong crypto prices over time (as is liquidity). Liquidity will rise faster soon too, which creates reflexivity.
Bears hold firm at horizontal resistance
Source: TradingView
As though denying the possibility of a Bitcoin rally, at least in the short term, the Bitcoin bears have held firm, possibly now succeeding in rejecting the $BTC price from the $78,660 horizontal resistance.
Looking at the 4-hour chart above, it can be noted that the constant pounding on the resistance level has so far led to nothing. It might have been expected that this level would have broken, given around 11 attempts in this short time frame, but at least up to now, the bears are winning this particular battle.
Double bottom and solid horizontal support
Source: TradingView
The daily time frame illustrates how important it is for the bulls to take advantage of a double bottom and solid horizontal support just below. The horizontal support levels are massive. $69,000 is the top of the previous bull market, so holding this is absolutely crucial.
Further in favour of the bulls is a ‘spring’ from a Wyckoff distribution pattern, together with Stochastic RSI and RSI that are both in oversold territory. The RSI is also sporting hidden bullish divergence.
A bottom is in – or it is very close
Source: TradingView
Moving out into the 2-week time frame the question is can this weekly candle remain green and start the next rally? It has an incredibly strong price structure from which to base a reversal from. Unless there is something fundamentally wrong with Bitcoin, it would not make a lot of sense for the price to break below this structure.
The RSI at the bottom of the chart is getting to the lows associated with bear market bottoms, but then the Stochastic RSI indicators have rolled over now on the 2-week, as well as the weekly. However, they don’t have far to go to hit the bottom.
The higher the time frame the more they matter. This 2-week time frame suggests that a bottom is either in, or it is very close. The ISM has signalled that the world’s largest economy is pivoting. It’s quite likely that Bitcoin will pivot with it.
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.
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