Bitcoin Begins Relief Rally

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
On the hourly analog Bitcoin Bitfinex chart, you can see the down trending modified Schiff pitchfork channel that we have been tracking for a few weeks now and as discussed when this pitchfork was broken we could see a big jump in price.

Sure enough, price was looking down into the abyss on Friday afternoon, and could not make a new low from $5,755 from two Sunday’s ago. You can see that long-term support at the lime green line stretching downward across the snapshot and there are 3 big candle wicks poking down through there, but the bulls were lined up at the trough.

Shortly thereafter price exploded higher clearing out a full standard deviation on the pitchfork which is purple and red downward channels. Once price soared out of the pitchfork , you knew there would a retest, which happened only and hour later and then the bull rally was on as price moved back up to highs of $6,545.

The weekend consisted of a nice consolidation period between those pink lines which represents a bullish flag and then after the 55 EMA line in orange rose up to where the candles could tempt the bears downward twice, price moved higher today to a high of 6,681.

I think that price is due to get worked off a little bit and some profit taking to commence over the next few hours here, but the trend is now in the bulls favor on the these smaller time frames. You can see how all the moving averages lines on this hourly chart, are stacked in terms a bullish trend where the lower moving averages (50, 55) are stacked on top of the higher ones (100, 200).

Overnight, I could see price heading back down to touch the red line at the .236 Fibonacci level at $6,467, but I think the bulls are going to be eating up at dips that take place especially if they are around the blue 50 MA and orange 55 EMA .

The RSI is naturally overbought here, but it still made a higher high from the price pop on Friday, signaling a continuation of the uptrend. Once price moves back down a little bit to a more neutral RSI level I think there got be another pop in price to the $6,760 level. The MACD is also flattening bearishly and the histogram is trending downward.

On the daily analog Bitcoin Bitfinex chart, things are looking quite bullish as you can for price is moving away from the down trending pitchfork . I think the target over the next few days here might be that $7,068 level at that turquoise long term .65 Fibonacci line, that was good support in late May and may prove to be decent resistance this time around.

On this time frame Bitcoin is still in a downtrend and needs to be treated with caution still. You can see how all of the Moving Average Lines here are stacked upside down bearishly and by the time price gets back up to that $7,000 level, we could see some strong resistance at the light blue 50 and orange 55 day moving averages respectively.

If price doesn’t continue to get bullish volume over the next few days, then the bulls are in big trouble as I could see this being some sort of bull trap that would then roll price slowly back over and plummet back down into the pitchfork into new lows for 2018. That appears unlikely at this point, but we need to be careful to watch what the market gives us.

The RSI is moving up quite quickly already past the 50 level at 50.38. I have also drawn a pink line on the RSI indicator to show the strong bullish divergence with the up trending higher lows on the indicator while price was making lower lows.

The MACD is also beginning to trend upwards as well and the histogram is still clearly moving in with upticks above the 0 line. If the blue trigger line breaches the 0 bound line as well that should provide additional price upward movement in maybe in another week or two.

Could be a big inverse head and shoulder bottom in the mix too, but more tomorrow. I always run out of characters here.

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