BTC price at press time: US$285
Last week’s price alert began with:
“Price had been consolidating above the 50 & 100 day EMAs for some time after breaking above them, which was a bullish sign. Now price is right up against resistance at the 200 day EMA (~US$271) and looking to break above it. Doing this should pave the road for a test of the US$300 area. Something else bullish is also occurring. The 50 & 100 day EMAs are about to make a bullish crossover. This is what one wants to see if a real bullish picture is to emerge. Right now, the 200 day EMA is above the 100 day, which is above the 50 day. If bitcoin is to start a major uptrend, the 50 EMA will need to be above the 100 EMA, and the 200 EMA should be at the bottom. This is something to watch.”
Needless to say price has broken above US$271 and this indeed paved the way to US$300, which it seemed to have no problem piercing. Price made an intraday high of US$317 before snapping back to earth. The US$300 mark was an area of great resistance and the charts were starting to look extended so a Greece deal was a good excuse for price to correct what was a nonstop upswing. In fact, bitcoin was up for 11 straight days and the price never consolidated a huge 1 month run up. A lot of bullish factors in the last week led to the price reaching multi month highs, including the LTC-to-BTC pump and dump, Grexit and China’s markets and Beijing’s response to it.
The 50 day and 100 day have also crossed over for the first time in well over a year. The EMA’s are now sloping upwards and watching the 50 day and 100 day EMA overtake the 200 day will be something to pay attention to. Sentiment has certainly shifted dramatically as well, and the chart is still looking bullish here. If price can consolidate at these levels and break above US$300 again that would be bullish price action.
Price had been consolidating above the 50 & 100 day EMAs for some time after breaking above them, and it was hugging against the top of the 200 day EMA, where it had broken above big resistance at US$300, before falling back below it. Getting above $300 should prove a battle now.
The RSI became overbought and it now correcting that condition. The price is testing support levels now and needs to hold. Nevertheless, RSI is on a buy signal. Right now, 50-55 looks like the support area in RSI. The Money Flow Index is also on a buy signal and in bullish territory. OBV has begun picking up slightly but is not convincing; it is not at the pace one would expect with the rise in price. It would be good to see volume confirm price. A line of resistance has been drawn through the OBV chart and it still has not broken above that line, volume continues to be light to the upside. If volume picks up this may be what lifts the price in its next leg up.
The one-year Ichimoku (cloud chart) shows price remaining well above the cloud (the trend is bullish) and in very bullish territory. The trend has been intensifying as price has been surging. In fact, the cloud ahead has started liftoff as well, meaning price has room to run here. The price has broken out of that consolidation range it had been in and is now looking for support after coming down from above $300.
The Tanken Sen and Kijun Sen are both above the cloud and trending hard with the price. The Chikou Sen (Lagging Line) has gone skyward, and since it’s a very lagging indicator, the fact that it has caught up to price means it might be time for a pause before we test higher levels. Everything looks to be in sync in the clouds.
For further definitions of what is being discussed, please refer to this previous post on Ichimoku cloud charts.
Fibonacci retracements have been drawn from two price tops: the mid-November high of ~US$424 and the July 12 high of ~US$310.
Price has broken above resistance levels to the upside. So if price continues its upside move, it will meet resistance at US$330 and then at US$366.77. The big test will be $330, as that’s where the big breakdown occurred that led to the US$170 lows.
If we are going to see some downside, US$300 will be the first test, followed by US$289 and US$275. After a big up move, it would be healthy for the price to settle in before going higher.
MACD is at its highest level since March, and is on a buy signal. RSI, as mentioned above, is bullish too. Both are in overbought territory here, which is another reason to expect a pause.
Included is the Directional Movement Index (DMI), which looks at buying and selling pressures. The blue line indicates buying pressure, the red line indicates selling pressure, and the orange line is the ADX, which indicates the strength or weakness of a trend.
Buying pressure and the ADX line are very bullish, but are pointing to extreme levels right now. The ADX line can’t really get much higher than it is now. While the bulls are in total control right now, and buying pressure continues upward, ADX is signaling price might look to pause. The ADX line remains above both the Buying Pressure Line and the Selling Pressure Line at very high levels. This puts it on a buy signal.
The price is now above the upper Bollinger Band, and has been stretching out the bands for the last week. Volatility and price action has returned, and this widening of the bands signals there is more price movement coming. However the B-bands have widened enormously in a short time. The B-bands are bullish here, but the price needs consolidation. The B-Bands are in a clear uptrend though.
The short-term price has fallen in just one day. Support at US$300 and US$293 short term both broke. So far ~US$280has held and needs to continuing holding as price consolidates. The RSI is bearish here as price looks for support. MFI and MACD areas well with the MACD having a bearish crossover short term. Look for a short term oversold signal before buying or price holding US$280.
Volatility has come back to the price and if US$280 holds, buying on dips looks sound. Pullbacks should be seen as buying opportunities, unless newfound support is breached.
The bulls have seized control but the bears are attempting a raid and now it’s time to see where price wants to go. Let’s hope volume follows.