Bitcoin Bull Market Intact: A Technical Analysis of BTC's Uptren
Technical Confluence For Bitcoin Uptrend on Daily and 3-Month Timeframes
Daily Timeframe
Daily Timeframe
- The 200-day simple moving average (SMA) is an important longer-term trend indicator on this chart. In late 2018, the price fell below the 200-day SMA, indicating a change to a downtrend. It remained below this average until forming a bullish crossover in early 2019, signaling a resumption of the long-term uptrend.
Since then, the price has continuously found support at the 200-day SMA during intermittent pullbacks. Holding above this average bodes well for the continuation of the long-term bull market in Bitcoin.
- Looking closer at recent price action, there is a bull flag formation visible from late June to early August 2021. This is a bullish continuation pattern where the price consolidates in a descending channel after an initial sharp rise. The break above the flag pole high around $33,000 confirmed the bull flag and suggested the uptrend would resume.
Since then, BTC prices have surged to new all-time highs above $63,000. Momentum indicators like the Relative Strength Index are not yet in overbought territory, leaving room for further upside before short-term momentum becomes stretched.
In summary, long-term trend indicators and recent price patterns point to an ongoing bull market for Bitcoin. As long as the 200-day SMA continues to provide support during pullbacks, further new highs are likely this cycle.
3 Month Timeframe
On the 3-month chart, there was a significant bullish breakout above a downward sloping trendline that had been in place since April 2021. This breakout confirmed the transition from a downtrend to an uptrend on this time frame.
The current bearish candlestick is retesting the area of the former resistance trendline, which will now look to act as support. This is a common occurrence after a major trendline breakout, as prices will often retest the breakout level for support before continuing the direction of the prevailing trend.
Given that support holds at this level, which coincides with the previous downward trendline, it indicates buying interest remains strong. We will now enter a long position by buying at the current market price, expecting the uptrend to resume once support is established. Our initial target will be a retest of the all-time high prices above $63,000.
By entering long now on the retest of the former resistance trendline turned support, we aim to capitalize on the continuation of the primary 3-month uptrend in Bitcoin. Our trade thesis is supported by the trendline breakout and expected retest/support hold on this timeframe.
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