The big question remains whether Bitcoin is continuing the bullish trend or whether we are past the top and moving further down. There are some similarities with April 2018, while I also see some differences. Let's got through them one by one.
Similarities:
1. We have seen a long bull run that ended with a substantial sell-off, a selling exhaustion spikethat tested 50-week MA, followed by optimism that led to a test of previous range highs as well as the 20-week MA;
2. Parabolic SAR continued to show a bearish bias even during the optimistic times;
3. MACD continued to show a bearish environment.
Differences:
1. RSI showed a continuous pattern of lower tops during the bear market stage. In the current situation, we see a higher top;
2. The 20-week MA ended up crossing the 50-week MA. This hasn't happened just yet, but the lines are moving in opposite directions;
3. We have not seen a blow-off top, nor have we seen a typical "return to normal" influx of buyers after the top that leads to a quick lower top, confirming the bearish trend. Both blow-off top and return-to-normal phases have been missing.
Based on the above, my conclusion is that we are still range trading without a clear decision, however I have reason to be optimistic. As a strong believer in RSI, the higher top in combination with the absence of a clear blow-off top leads me to believe that we are not done yet with the bull market. We could see a test to the mid-range around 36-37K and only if that would fail (based on daily close) would I get worried. It is however critical that we see a weekly close above 20-week MA AND above the key resistance line at 42K. Once this is achieved, we should start looking forward to a very good second half year for crypto.
Similarities:
1. We have seen a long bull run that ended with a substantial sell-off, a selling exhaustion spikethat tested 50-week MA, followed by optimism that led to a test of previous range highs as well as the 20-week MA;
2. Parabolic SAR continued to show a bearish bias even during the optimistic times;
3. MACD continued to show a bearish environment.
Differences:
1. RSI showed a continuous pattern of lower tops during the bear market stage. In the current situation, we see a higher top;
2. The 20-week MA ended up crossing the 50-week MA. This hasn't happened just yet, but the lines are moving in opposite directions;
3. We have not seen a blow-off top, nor have we seen a typical "return to normal" influx of buyers after the top that leads to a quick lower top, confirming the bearish trend. Both blow-off top and return-to-normal phases have been missing.
Based on the above, my conclusion is that we are still range trading without a clear decision, however I have reason to be optimistic. As a strong believer in RSI, the higher top in combination with the absence of a clear blow-off top leads me to believe that we are not done yet with the bull market. We could see a test to the mid-range around 36-37K and only if that would fail (based on daily close) would I get worried. It is however critical that we see a weekly close above 20-week MA AND above the key resistance line at 42K. Once this is achieved, we should start looking forward to a very good second half year for crypto.