Bitcoin (BTC) has had a dramatic and surprising new uptrend in the last few days, breaking up when most seasoned analysts thought a correction was in order. This uptrend has come to a head, after breaking the local market highs during the night of June 15 (UTC).
We can see the rally, here on the hourly Bitstamp chart, petered out just a hair under $9,400, and at time of writing a small pullback is churning through the motions. This is a very small pullback so far: only making it down to the first support line at the previous local high.
We should watch the 9 exponential moving average (EMA) here, to see if the price is able to close above it in the coming hours and continue to the obvious target: $10,000.
A look at the 4 hour gives us at the local market structure. We can see the healthy pickup in volume that has fueled this latest rally. We also note the dangerous distance between price and moving averages (blue line).
At this point, it seems possible that Bitcoin will not retrace back down into the 6’s or even 7’s, especially if today’s weekly candle closes well (see below).But even if the leading crypto manages to hit $10,000 in the next days or hours (!), it will most likely correct at least a bit. Coming back down to test the $8,700 mark, the area which marked the breakout; and then the $8,300 area, are obvious dip-buying targets.
We may also note some features on the 4 hour RSI, namely (and this is repeated on the hourly RSI chart) the presence of a series of higher highs on RSI peaks. These casually indicate that strength has not left the rally. We should watch this chart in the coming hours, however, to see if a correction is enough to break the RSI trendlines.
With all the action on shorter timeframes, we still have to keep an eye on the daily, and the weekly - which this week is especially important.
Closing above the previous local high, today, of $9,100 would be very exuberant, and probably signal an easy, final pump to $10k. A different kind of candle, with a close below $8,800 for example, would present a menacing sell wick and probably signal a return to retest $8,300.
We may also note that the daily RSI is now well back into bullish territory, above the key 55 mark, which will now act as support when a retest comes.
The weekly candle, which will close tonight, is perhaps even more important than the daily one.
A failure to match the previous week’s opening price - at $8,740-ish - could signal that that infamous correction back down could actually play out; or at least that consolidation in the 8’s is necessary.
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