Battle on the 50 Week MA: $4 From Bitcoin Bear Trend
The crypto market pulled back today after a productive weekend making new highs on the rally from May 29th. But the strength in the market is still not there. Let’s take a look at the cornucopia of encouraging news as the pendulum slows.
The first snapshot we are looking at below is the hourly analog Bitcoin Bitfinex chart, and you can see how we had a nice weekend with price running up to $7,779 before hurtling back down to the lows today of $7,451.
We were tracking this large turquoise colored rising wedge before the weekend and it did a pretty good job of holding price until around 1am EST where price was decisively broken and it has bounded down all day to the black line 200 hour moving average at $7,465.
That lime green horizontal support line at $7,500 also has been providing good support, where it’s encouraging to see price bounce back above there in the last hour.
The key target is going to be getting back to that blue 50 hour moving average where I would expect there to be some resistance on the way back up. If price fails to get back above there or possibly the $7,600 - $7,550 level this could be the corrective B Elliot wave leg, which then I would expect price to come back down to the dark blue up-trending line at about $7,400.
However, the RSI is looking good as you can see it rallying upward from the lows earlier today at oversold level and there is some strong bullish divergence as indicated with the maroon lines on the price and RSI chart. Price made lower lows and the RSI indicator made higher highs and since than price has headed higher.
The MACD is also looking good with the blue line bullishly crossing up from under the orange line. I drew a lime green trend line on the histogram portion as well to show the clear uptrend we have been in the past few hours. We may see some additional big green candles in the next few hours here too.
This could take a few more hours to shake out overnight, so something to keep an eye on carefully.
I want to throw two more weekly analog Bitcoin charts into the mix here because I had discussed them on Friday. The first was that we needed price to close above $7,709 (at the time) where the 50 week moving average was on the weekly chart to avoid giving the impression that this market was heading into a longer term bear cycle.
As documented here in the past, it’s ended quite poorly when this crossover happens with price and the moving average.
This mission was almost miraculously accomplished on the area I circled in black on the chart, where you can barely see the candle closing above there on the week. The candle closed at $7,718. The 50-week moving average closed at $7,714. $4 from a huge bear market trend. This is hilarious and all I can say is someone is watching these levels carefully.
If this trend continues, price will need to get back above $7,815 by the end of the week. A reasonable request.
The next chart is of standard pitchfork on the weekly BTC as well, because it’s been a while since I have used those for charting, but the red 2x on the median line is quickly approaching next week and will be another paramount area to watch as it is based off of Newton’s 3rd law of every action having an equal and opposite reaction.
If this technique holds and price swings to the other end of the pitchfork, could we see BTC at 50K in a few short months? Possibly. It feels strange to say though because it seems so far-fetched. But, it’s also exciting to think about, while we sharpen our technical analysis swords and hone our craft.
More on Vanddar.com
The first snapshot we are looking at below is the hourly analog Bitcoin Bitfinex chart, and you can see how we had a nice weekend with price running up to $7,779 before hurtling back down to the lows today of $7,451.
We were tracking this large turquoise colored rising wedge before the weekend and it did a pretty good job of holding price until around 1am EST where price was decisively broken and it has bounded down all day to the black line 200 hour moving average at $7,465.
That lime green horizontal support line at $7,500 also has been providing good support, where it’s encouraging to see price bounce back above there in the last hour.
The key target is going to be getting back to that blue 50 hour moving average where I would expect there to be some resistance on the way back up. If price fails to get back above there or possibly the $7,600 - $7,550 level this could be the corrective B Elliot wave leg, which then I would expect price to come back down to the dark blue up-trending line at about $7,400.
However, the RSI is looking good as you can see it rallying upward from the lows earlier today at oversold level and there is some strong bullish divergence as indicated with the maroon lines on the price and RSI chart. Price made lower lows and the RSI indicator made higher highs and since than price has headed higher.
The MACD is also looking good with the blue line bullishly crossing up from under the orange line. I drew a lime green trend line on the histogram portion as well to show the clear uptrend we have been in the past few hours. We may see some additional big green candles in the next few hours here too.
This could take a few more hours to shake out overnight, so something to keep an eye on carefully.
I want to throw two more weekly analog Bitcoin charts into the mix here because I had discussed them on Friday. The first was that we needed price to close above $7,709 (at the time) where the 50 week moving average was on the weekly chart to avoid giving the impression that this market was heading into a longer term bear cycle.
As documented here in the past, it’s ended quite poorly when this crossover happens with price and the moving average.
This mission was almost miraculously accomplished on the area I circled in black on the chart, where you can barely see the candle closing above there on the week. The candle closed at $7,718. The 50-week moving average closed at $7,714. $4 from a huge bear market trend. This is hilarious and all I can say is someone is watching these levels carefully.
If this trend continues, price will need to get back above $7,815 by the end of the week. A reasonable request.
The next chart is of standard pitchfork on the weekly BTC as well, because it’s been a while since I have used those for charting, but the red 2x on the median line is quickly approaching next week and will be another paramount area to watch as it is based off of Newton’s 3rd law of every action having an equal and opposite reaction.
If this technique holds and price swings to the other end of the pitchfork, could we see BTC at 50K in a few short months? Possibly. It feels strange to say though because it seems so far-fetched. But, it’s also exciting to think about, while we sharpen our technical analysis swords and hone our craft.
More on Vanddar.com
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