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Analysis

Another push up for Bitcoin?

NZD

After Bitcoin's six-month bullish explosion, there was a sizeable correction during Q2 of this year. However, the failure to fall through the 30,000 in July signalled the end of the correction and that the bulls were stepping back in.

On the daily timeframe, price has begun making higher highs and higher lows, along with bullish moving average geometry with the 10, 20, 50, and 200 moving averages (MAs) aligned in the correct order suggesting a revival of the uptrend. There is also bullish convergence of both MACD and RSI indicators, which possibly implies that there could be continued momentum to the upside. There is a horizontal level just above price at around 47,500, and if this level holds, the renewed uptrend may be short-lived. However, suppose the level breaks to the upside. In that case, there is potential for a surge up towards the next horizontal level of resistance at around 57,500 and perhaps beyond. Between the two aforementioned horizontal levels, there could be several buying opportunities for trend traders.

Zooming in on the daily chart below, price action has recently pulled back towards the buy zone – the area in and around the 10 and 20 MAs. A small to medium sized bullish candle printing in this area could indicate the extent of the pullback and thus the beginning of the next move up. Trading this, however, could have limited upside due to the proximity of the horizontal level at 47,500. A more conservative trader might wait for the level to break to the upside before stalking a pullback down to, and bounce from, that same level.  An alternative view, should the 47,500 level prove too resilient, would be a move back to the old resistance level of 41,000.

The case for a bullish Bitcoin is supported by the All Crypto Index and the Major Crypto Index (Daily charts below). Both of which are showing the same bullish price action on the daily timeframe as Bitcoin, however price has recently broken above horizontal levels at 16,000 and 33,000 respectively and now settling back down upon them. The next move higher could very well stem from here.


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