Like a phoenix rising from the ashes and the thunderclap of the Queen melody We will Rock you, Bitcoin is back! Many of the pundits who were eagerly waiting for the price to break below $9000 have been left waiting at the altar holding their counter-trend bags. Could Bitcoin be in the process of resuming its upward march or is this a dead cat bounce? Let’s do some mental gymnastics and find out!
We all need a bit of support from time to time. Even our superhero Bitcoin needs a helping hand and it appears this came in the form of the monthly support (resistance at April 2018 close) at the price region of $9250 which held steady on the high time frame close. Bitcoin entered the month at $10 088, keeping prices north of the psychological $10 000 barrier on the monthly time frame. This can be seen as an incredibly bullish move.
There are many things lining up on several time frames that hint at price moving further up, amongst the main ones to watch are EMAs (exponential moving averages), RSI (relative strength Index and Stochastics. They are all firing off bullish signals.
Specifically, the 1 Day, 2 Day and 3 Day times frames have all regained their 21EMAs. The 1 Day and 2 Day stochastics have all crossed and are facing north (this is a good sign as previous occurrences have led to substantial sustained up moves). Not wanting to be left out, the 3 day is also hinting at a cross up on the Stochastic which could confirm on the next candle close. It is also worth noting that the weekly Stochastic is showing signs of slowing its downtrend and a possible cross up is on the cards over the coming 2-3 weeks. Lower time frames do make a strong case for this to happen. When zooming in to lower time frames such as the 4-hour, price action has been constructive with dips being bought back quickly.
The 4-hour Golden cross has been confirmed and already price reacted with a nearly $1000 move pushed by bulls overnight through the $11 000 area straight up to $11 800. A golden cross is when the 50EMA and the 200EMA cross up (50 crossing up on the 200), and it is usually a very good indicator of more uptrend and a very bullish sign.
Previous 4-hour golden crosses in a bull market have led to substantial sustained up moves, and there is no reason that this time should be different.
On the more cautious side of things, there are some headwinds to be aware of. Bitcoin has to prove itself before boarding the lunar rocket, so to speak.
First on the checklist of unattended chores for Bitcoin to complete would be to close a weekly candle above $11 475, although the BTCUSD pair has ventured higher during 2019 it has failed to close a weekly candle above this point. Sellers have stepped in at this price level and defended it before, but will they do it again?
Secondly, another area where profit-taking may cause some downward pressure is at $12 060, where the 618 Fibonacci retracement is found from the July top to bottom. Daily closes above this area would be a huge boost for confidence to boost price higher with targets at $12 300 and then $12 930 next to tick off the list. If all the above are ticked off the list, Bitcoin could challenge the 2019 high and beyond.
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