For the last few days, Bitcoin (BTC) has been steaming solidly up after a decent bounce off of the important $9,400-500 support level. Now, after breaching the likewise important $10.6k resistance zone, BTC has exploded up to nearly $12,000.
We first look at the weekly closing. Last week has closed well above the prior, forming a bullish engulfing candle close. This close probably gave the market confidence to pile in during today’s trading.
But we can qualify this bullish price action. For one thing, the volume has not exploded (Coinbase exchange) in tandem with price. For another, we can pick up a bearish divergence on the weekly RSI: higher price lows are met with lower RSI lows. The histogram, however, is flattening out nicely.
Getting down to the action, we look at the 4-day chart. Breaching and retesting the resistance zone around $10,600 was the catalyst for a strong push up, along with the bullish weekly close.
$12,000, like $13,000 on the last cycle, may not give way at this time. The histogram is flattening out, and the RSI here is quite overbought. A pause here seems likely; and if we look at the 12-hour chart we see why.
On the 12-hour, the clear formation of a downward channel suggests that the present pump may already be at an end, near $12,000. If price were to break out here, it would break completely clear of the local, post-May market structure. This could certainly happen, although the volume profile has not broken out of its own trend.
This general decline in volume suggests a period of consolidation – which has not ended until volume breaks. Even if price does not break out here, however, it would be extremely encouraging to retest the important 66 exponential moving average (EMA), which has been a critical moving average on the 12-hour chart during Bitcoin’s 2019 bull market.
In total, Bitcoin’s continued press above many critical levels is solidifying the notion that the July retracement period is over, and that Bitcoin’s full uptrend will soon resume. A break now of $12,000 would all but confirm that; and if not, a successful retest of $10,600, or even just $10,000 would continue to encourage that narrative.
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