Bitcoin (BTC) is looking strong today, after breaking out to the upside from a period of consolidation above the critical $5,000 area. The leading crypto is now retesting the topside of its April channel, first laid between April 3 and 6.
There is a good likelihood of rejection here, owing to tepid strength and volume on the attempt (at time of writing it already looks to be rolling over). A rejection here is not bad, however, as Bitcoin’s ranging in this channel could give the rest of the market some runway: a stable Bitcoin is historically the only time when altcoins do really well, and this still seems to be the case.
While short term volatility for Bitcoin looks to be cooling off, the leading crypto still looks great on longer term timeframes.
On the weekly chart above, the trend is a clear “up” as all of the April gains were handily defended - even with last week’s Tether/Bitfinex news, which does not appear to have damanged the market much. And the weekly histogram has, for the first time in over a year, shown strength above the median line.
What’s more, the latest weekly candle is so far looking fabulous. If this candle can last a few more days at this level, it will form a bullish engulfing candle versus the previous week’s red candle and look extremely promising.
The daily chart looks less bullish, though, suggesting that such a good weekly candle might evade us. Although we have achieved a “golden cross,” we can clearly see falling strength on the daily RSI, with lower highs and lows. Falling volume is visible, suggesting consolidation.
All Bitcoin really needs to do is range above $5,000 - only that much strength is necessary. If it can do this, gather strength for a new movement, and let the rest of the market run, this would be completely ideal.
The negative alternative is falling back below $5K. This retrace would fall into a sort of no-man’s-land between $5,000 and $4,200 where this is very little recent price history - and thus little predictability for support zones. But we’ll worry about that if it happens.
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