Throughout the weekend and continuing into the early week, BTC-USD saw a strong rally that brought the price from $3500s to prices in the high $4100s, at the time of writing. Amid global turmoil and Chinese news that initially appeared to be bearish, BTC-USD has seemingly found its bottom and is now working its way onward and upward. Here is a look at the current state of the market and what we can expect in the coming days:
Figure 1: BTC-USD, 6 Hour Candles, GDAX, Macro Fibonacci Retracement Values
At the time of this article, BTC-USD is encountering resistance along the 61% macro retracement values. Resistance at these values is expected to be strong because it had found previously strong support during the beginning stages of the previous bear run. It’s not expected to make a clean break, so a possible, small retracement may pull the market back slightly before continuing upward. Even though we may see a slight pullback, it was very clear that the market is now leaning bullish:
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The market is currently finding support on the 6-hour candle’s 200 and 50 EMAs. Typically, when the market is trending below the 200 EMA it is said to be “bearish,” and when the market is trending above the 200 EMA it said to be “bullish.”
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The current market trend is pushing the price to new local highs. A trend that brings new highs shows a changing of tides as the bears begin to capitulate and the bulls begin to take over.
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On our current rise, the volume is increasing. When the volume increases within the trend, it shows there is strength in the current direction and is likely to continue.
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The 6-hour MACD is showing no signs of divergence and every new high is being accompanied with new highs on the MACD histogram. Currently the macro trend is showing strength with bullish momentum.
If we zoom into a small timeframe and look at the 2-hour candle trend, we can see a similar, bullish sentiment beginning to form:Figure 2: BTC-USD, 2-Hour Candles, GDAX, EMA Cross
Inside the rectangle within Figure 2, we can see that the 200 and 50 EMAs have crossed and are now showing a positive slope with their curves. Historically, the 200 and 50 EMAs for the 2-hour candles have been a great indicator as to the immediate health of the market.
If a bear market makes a strong enough move upward and the 50 EMA crosses the 200 EMA to the top, this market activity is sometimes referred to as a “Golden Cross.” It’s called a Golden Cross because it is a strong market indicator that usually shows the turning of the tides as the bearish traders give way to the bullish traders.
Although there may be some pullback before we climb any higher, we have strong support in the $4100s so it wouldn’t be surprising if we made a test of that support level before climbing onward.
The $4100s also coincides with the 38% retracement. The 38% retracement is a very common retracement value within strong bull runs. Markets rarely make decisive, healthy moves in a singular direction. Often, they take a stair-step type of trend that moves up, retraces, moves up, retraces, ettc. The 38% can be seen as the first stair within our current bull market.
Summary:
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BTC-USD managed to make a new high and break the multi-week long descending trendline.
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BTC-USD is showing macro trend strength but will likely see a little pullback before continuing higher.
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If we do see a pullback, we can expect strong support in the $4100s.
Trading and investing in digital assets like bitcoin, bitcoin cash and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.
The post Bitcoin Price Analysis: BTC Makes New Highs as the Market Tests Historical Support appeared first on Bitcoin Magazine.
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