Bitcoin Continues to Consolidate Recent Bull Leg
Bitcoin (BTCUSD) follows technical patterns in textbook ways, thought some see it differently.
Currently, Bitcoin is trading at: 9,331.26, -311.44, or -3.2455%, as of 4.01a BST, the market is open
Have a look.
Each of these candles represents a frame of 4 hours before the next 1. It offers a clear picture of what has happened with Bitcoin through the latter part of April, and why we are confident Bitcoin has seen a Key reversal in the pattern.
Support and Resistance
Note the 21-Day EMA, the 55-day EMA, the 100-Day EMA, and the 200-Day SMA, as support and resistance marks. These are shown on the chart above as the blue line, the green line, the orange line, and the purple line, respectively.
From a technical ooutlook, a downtrend is signified by the arrangement of the moving averages in relation to each other.
On the chart above, the 200-Day SMA is above the 100-Day EMA. This is shown by the square A) on the left of the chart. Look at square A) on the right side of the chart, though, and you will see this situation is reversed, with the 100-Day EMA above the 200-Day EMA.
Now look at squares B), and C), compare their positions on the left side of the chart, with those on the right side of the chart, and will see this reversal repeat itself for each of the moving average lines. The right hand side is the arrangement expected in an uptrend.
Then, after flattening off at the beginning of April, the price climbed sharply after the 21-Day EMA crossed the 55-Day EMA, triggered by the 10% spike, by Bitcoin 12 April 2018.
Then, see a movement in price when the 21-Day EMA crosses the 100-Day EMA on 16 April, and another when it crosses the 200-Day EMA, 4 days later on 20 April.
These MA (moving average) indicators are used to predict movements in the market. They apply to any market, not only Bitcoin.
The 21-Day EMA is very useful at plotting ahead.
The chart above shows the price moves above and below this average more often than any of the others.
When the price is consistently above the 21-Day EMA, and the 21-Day EMA is above the 55-Day EMA, the price is in uptrend mode. And if the price rises way above the 21-Day EMA, but snaps back to it, it presents a buying opportunity before the price again regains its upward move.
So, backed by the 21-Day EMA technical theory, if Bitcoin keeps it upward momentum, and sustain above recent highs at $9,420 as of 30 April, then it continue to move North.
The next resistance Bitcoin is at $11,435-$12,770.
The world’s Top cryptocurrency must break this major resistance area to continue higher. If it respects this area and is turned back to the prior low at $5,943 or below, it could be in real trouble.
I am not reading such an outcome now, but now that we have futures and options are prepared.
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Have a terrific week.
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