Fairlead Strategies warns that Bitcoin (BTC) bulls may experience disappointment as the monthly stochastic indicator signals an "overbought downturn." Developed by George C. Lane in the 1950s, the stochastic indicator recently turned down from above 80, implying a loss of upward momentum. The indicator's range lies between 0 and 100, with readings above 80 suggesting overbought conditions and readings below 20 implying the opposite.
Katie Stockton, the founder and managing partner of Fairlead Strategies, noted in a Monday client communication that Bitcoin confirmed an overbought downturn in its monthly stochastics at the end of August, indicating a potentially drawn-out basing process. Stockton also pointed to Bitcoin's repeated difficulty in surpassing the "cloud resistance" at $31,900, referring to a prolonged bottoming process being "a setback toward a long-term turnaround."
Previous overbought downturns in early 2021 and December 2017 corresponded to significant price peaks. The monthly MACD histogram, which measures trend strength and changes, currently hovers near zero, signaling a neutral long-term bias. Although the histogram bottomed out a year ago without turning positive, Stockton emphasized that this implies a sustainable uptrend is not yet in effect.
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Katie Stockton, the founder and managing partner of Fairlead Strategies, noted in a Monday client communication that Bitcoin confirmed an overbought downturn in its monthly stochastics at the end of August, indicating a potentially drawn-out basing process. Stockton also pointed to Bitcoin's repeated difficulty in surpassing the "cloud resistance" at $31,900, referring to a prolonged bottoming process being "a setback toward a long-term turnaround."
Previous overbought downturns in early 2021 and December 2017 corresponded to significant price peaks. The monthly MACD histogram, which measures trend strength and changes, currently hovers near zero, signaling a neutral long-term bias. Although the histogram bottomed out a year ago without turning positive, Stockton emphasized that this implies a sustainable uptrend is not yet in effect.
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