Michael_Wang_Official

BTC/USD: A Clear, Bullish Trend

Long
BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
In this post, I'll be analyzing Bitcoin's weekly chart, demonstrating why the overall trend is extremely bullish .

Analysis
- To begin with, it's important to note that we have broken out of the descending trend line resistance on the weekly chart (marked by the blue trend line )
- This is a trend line resistance that valid for over 2 years
- Now that we have broken out of this resistance, it is now a resistance-turned-support
- We saw a pullback; a correction in the price to retest the support, before rallying further upwards
- This was a pullback that I have anticipated, and also mentioned in my previous analysis:
- Bitcoin broke out through the 0.5 Fibonacci retracement resistance, and hit the 0.618 levels yesterday
- Overall, this has created a clear uptrend with higher lows and higher highs, and prices trading within an ascending parallel channel
- We can also notice the signs of a bullish reversal, as prices have been painting a reverse head and shoulders pattern
- While the Relative Strength Index ( RSI ) can be concerning, as it is reaching overbought territories, we can see from past technical indicators that the RSI entering overbought regions does not necessarily indicate the end of a bullish trend
- We can also see that there is a lot of bullish momentum, as the Moving Average Convergence Divergence ( MACD ) has formed a golden cross, immediately after forming a death cross

Conclusion
In summary, Bitcoin's overall trend is very bullish . Since the trend is your friend, the best strategy is to buy the dip, until Bitcoin provides a clear confirmation of a trend reversal. Simplicity is key.

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I would also appreciate it if you could leave a comment below with some original insight.

Comments

Every time I look at this chart, it feels like it has a good potential of momentum buildup. I could easily take the 2019 highs and gain more momentum. That's the sort of situation where EW theory could be interesting to experiment with: I mean, before any pullback prices might well make a significant impulsive move up. If 2019 highs were wave 1 and the bull run from march lows wave 3, then we could be heading to 2017 highs? And if from March lows we started wave count 1 then now we're heading to 17000? How do you see it?
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what kind of percentage drop would constitute a dip without a clear confirmation of a trend reversal?
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Michael_Wang_Official JesseRyanLongoria
@JesseRyanLongoria, I wouldn't necessarily look at it from percentage drops, but whether key support levels are protected and resistance levels are broken. Closing above/below support/resistance is the type of confirmation I look for. For instance, in this case, I'd expect a reversal if we break down from the ascending channel support.
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JesseRyanLongoria Michael_Wang_Official
@Michael_Wang_Official, I see thank you
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