Bitcoin has been bearish in 2014 and most of 2015 so far.However, since the end of April, it has turned bullish. Let’s work ourselves up from the 1H chart and examine the reversal.
The 1H chart shows a market that is choppy but bullish. We can tell its choppy because the moving averages are crisscrossing, although the are now in bullish alignment and are sloping up. Price crossed above the cluster of SMAs, and is now trying to hold above them, which would add to the bullish picture. The RSI has pushed above 70 and is now holding above 40, which reflects maintenance of the bullish momentum from last week. Finally, the bearish attempt over the weekend seems to have formed a consolidation pattern, and price is now pushing above this pattern, signaling bullish continuation in the 5/11 US session.
The 4H chart shows a market that only recently found a price bottom after finding support at 213.83 and rebounding above 240. There was resistance around 243 and it did form a head and shoulders pattern. However, the fact that traders disregarded this “price top” is further evidence that this is a bull’s market. The fact that price held mostly above 230 shows that the market is anchoring up, respecting the central pivot area of the recent consolidation range, which is now looking like a price bottom.
The daily chart still shows a bearish market that is at best turning sideways.We can’t say its bullish until it makes the 2015 price action a price bottom. To do that it will have to at least break above 310. For now, the upside should be limited to this 300-310 area.
If the market is still bearish however, price might fall short of the 300 area and respect some intra-range pivots like one around 260. Another sign that the medium-term is still bearish is if the RSI fails to break 60 and turns down. Then, the pressure would be back to the 210-215 area, with risk of extending to the low on the year around 166.45.
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