Only a few hours into the week starting July 8, and Bitcoin (BTC) is off to a roaring start. Largely following on the heels of Ethereum’s (ETH) breakout last night (covered here), Bitcoin is again testing strong resistance at $12,000.
Before getting to the action, we start with the important weekly candle closing.
It’s no wonder that BTC is breaking out, because it closed the week strong. Although not completely decisive, strong buying is visible on the deep wick. Here, buyers responded to a very ugly “shooting star” candle closing for the prior week.
But even more notable, perhaps, are the technical indicators. The RSI, middle pane, closed out the week even higher than the previous peak, at nearly 79. Likewise, the histogram, bottom pane, finished the week with a new local high. These very strong closings present the real possibility of a continued Bitcoin bull market.
Moving to the daily, however, we see that volume is still dropping off in spite of these positive signs. What’s more, the very stiff resistance around $12,000 stands ready to throw back attempts to break higher. More volume will need to show up in order to break this level (red).
We also see that the moving averages how begun to catch up to price, and that Bitcoin is holding the 9 exponential moving average (EMA) well.
Moving into the weeds on the 4-hour chart, we see clearly a breakout from what was sideways consolidation. Here, we can see that volume has in fact clearly broken out - but whether or not this eventually translates to the daily chart remains to be seen.
The real test of this breakout has not yet come. $12,000 and above is the key area, and strong resistance. Perhaps more likely is a new, higher consolidation area between $12k and the 55 EMA. A break down back to the 200 EMA would cause us to reevaluate the situation.
If we have learned nothing else in 2019, it is not to underestimate Bitcoin. $12,000 could evaporate into a hazy memory in the blink of an eye.
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