TradingShot

BITCOIN on critical crossroads. Bullish vs Bearish dynamics.

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
The title is quite informative. Bitcoin is on critical crossroads and in this study I am looking at the conditions which are needed to sustain the Bullish over the Bearish dynamics.

** Before we start, please support this idea with your likes and comments, it is the best way to keep it relevant and support me. **


** The Bullish Sequence **
As seen on the chart, the trading pattern since the May 07 High resembles that of March 20 to April 23, which eventually resulted in a significant bullish break-out. Just as then, the current set-up is also on Higher Highs and Higher Lows. The duration of Sequence 1 was just over 1 month, Sequence 2 has already completed 1 month, so a big move is likely to take place.


** The MA20/50 Bearish Cross **
In order for that to happen, the Bearish Cross of MA20 below the MA50 (on the 1D chart) has to be avoided. The reason is because last time that Cross took place (March 05 ), Bitcoin didn't see a new High and collapses around -60%. Of course this was very much fueled by the stock market crash (related to the COVID outbreak), so the effects of this MA20/50 Bearish Cross may have not been so devastating on any other occasion, but I have to highlight it regardless. Unfortunately, BTC is close to forming this Cross in the next week if it doesn't sustain the Higher Lows sequence.


** The RSI fractal **
On the bright side, the RSI that led (and followed) that last MA20/50 Bearish Cross in March ( RSI fractal 1), seems to be different from the current sequence ( RSI fractal 2). The current one appears to be diverging from the downtrend and is turning sideways to say the least. If it breaks above its June 01 High, we have a confirmed divergence, and most likely we avoid the bearish scenario of a bigger drop as in early March.


Which formation do you think will prevail? The Bullish Sequence of March 20-April 23 or the Bearish Sequence of the MA20/50 Bearish Cross? Feel free to share your work and let me know in the comments section!

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Comments

Price action is even above the 10-day moving average. Turn this all around, would you buy now after a 150% rally since the bottom without a correction?
+4 Reply
aberlowi without_worries
@without_worries, um this was the recovery from a correction. Still 50% below ath. Name another asset class down more than 50% from ath?? Where do you want it to go so you can buy more? You'll probably get your wish
Reply
icrypto17 without_worries
@without_worries, it's not only the whales, dont forget the people who are shorting.
Reply
It seems bulls are losing strength. Nice analysis
+4 Reply
Be careful,

- the Bearish Cross always forms after the start of the drop and vice versa

- the RSI trend is bullish, look at the bottoms

- the pattern is bullish

We are going to have a "Bullish Sequence 3".
+4 Reply
TradingShot CrypTrader31
@CrypTrader31, Yes very probable according to the RSI which is close to breaking upwards.
+1 Reply
bearish
+4 Reply
TradingShot jackfischlum
@jackfischlum, Thanks for your opinion.
+1 Reply
The difference is the 200. Last time it was pointing down. Now it's pointing up...
+3 Reply
@BitFink, what's going to happen next got nothing to do with moving averages.
+3 Reply
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