PRICE ACTION
Starting with the 1W chart, we have seen successful break of the important 52W Moving Average followed by an incredible parabola move up through the $7000 and $8000 thresholds. The weekly close was the highest point since October 2018; which is a very strong indication that the bear market is over.
As we are currently seeing though, retail sentiment is very quick to take good bullish concepts and completely overextend them. While price is at its highest point since October, RSI has not been above 70.0 since January 2018 – when price was over $16,000 per BTC. This run is not a forever run, and you need to pay attention to signs and lock in profits!
The 5m chart doesn’t offer us anything of significance when determining the immediate sentiment of the market; with RSI channelling routinely and price recovering from the retest of $7000. Pricing below the $8000 support would likely break the upward trend – so consider that a key is monitoring sentiment.
4H charting gives us our biggest indication that this current move is about to cool off; with a bearish divergence forming against the higher high of the price action. Volume is increasing though, so the power of capital may override the technical importance of the diverging RSI formation.
In the event of a consolidation of price, if RSI falls below 60.0 and price remains inside the wedge; it will actually create a bullish scenario – so this is the counterpoint that needs to be watched.
With 1D almost at 90.0 RSI; it makes sense that we see cooling off at this point. The only unknown variable is how much the price retraces and whether the sell off scares weak hands back out of the market. The 28D MA is the closest key trend; below $6000.
A retest of the 52W MA is ultimately going to be the best setup for long term health (see LTCUSD); which could see a 30% pullback. That should give bears a nice final short position before switching to long term positions and riding the wave upwards.
OPEN INTERESTS (BITFINEX)
Long: 1.98 Days
Short: 2.00 Days
RELATIVE STRENGTHS
ON BALANCE VOLUME
KEY PRICE AREAS
Resistance: 8200, 9000, 9900
Support: 7250, 5930 (28D MA), 5566 (52W MA)
PREVIOUS ANALYSIS
Starting with the 1W chart, we have seen successful break of the important 52W Moving Average followed by an incredible parabola move up through the $7000 and $8000 thresholds. The weekly close was the highest point since October 2018; which is a very strong indication that the bear market is over.
As we are currently seeing though, retail sentiment is very quick to take good bullish concepts and completely overextend them. While price is at its highest point since October, RSI has not been above 70.0 since January 2018 – when price was over $16,000 per BTC. This run is not a forever run, and you need to pay attention to signs and lock in profits!
The 5m chart doesn’t offer us anything of significance when determining the immediate sentiment of the market; with RSI channelling routinely and price recovering from the retest of $7000. Pricing below the $8000 support would likely break the upward trend – so consider that a key is monitoring sentiment.
4H charting gives us our biggest indication that this current move is about to cool off; with a bearish divergence forming against the higher high of the price action. Volume is increasing though, so the power of capital may override the technical importance of the diverging RSI formation.
In the event of a consolidation of price, if RSI falls below 60.0 and price remains inside the wedge; it will actually create a bullish scenario – so this is the counterpoint that needs to be watched.
With 1D almost at 90.0 RSI; it makes sense that we see cooling off at this point. The only unknown variable is how much the price retraces and whether the sell off scares weak hands back out of the market. The 28D MA is the closest key trend; below $6000.
A retest of the 52W MA is ultimately going to be the best setup for long term health (see LTCUSD); which could see a 30% pullback. That should give bears a nice final short position before switching to long term positions and riding the wave upwards.
OPEN INTERESTS (BITFINEX)
Long: 1.98 Days
Short: 2.00 Days
RELATIVE STRENGTHS
- Micro (5m): Neutral
- Short Term (4h): Bearish Divergence
- Mid Term (1D): Overbought
- Macro (1W): Overbought
ON BALANCE VOLUME
- Mid Term (1D): Rising
- Macro (1W): Rising
KEY PRICE AREAS
Resistance: 8200, 9000, 9900
Support: 7250, 5930 (28D MA), 5566 (52W MA)
PREVIOUS ANALYSIS
Comment:
Here is an alternative cut of the RSI showing higher lows. IMO the divergence should play stronger at this area. But this market is very unpredictable right now.
Here is an alternative cut of the RSI showing higher lows. IMO the divergence should play stronger at this area. But this market is very unpredictable right now.
RSI on the pullback is the most important thing to be watching right now. Looking at the positioning of the price compared to the RSI; it looks like we may see a higher low formed (possibly off the RSI 50.0)