Bitcoin Retakes Key 2019 Moving Average, Retests $10.6k - Price Analysis

  • Short term: resistance at $10,600, slight pullback likely
  • Long term: increasingly bullish

Bitcoin (BTC) is looking better and better at the beginning of August, as it retakes level after level lost during the recent correction. And with each new level taken, it looks more and more like the 35% retrace from the local high of almost $14,000 may already be over - preserving Bitcoin’s long term uptrend. But some pieces of the puzzle are still missing.

Starting with the daily chart, we see the very clear progress Bitcoin is making. After closing July 31 above the important 55 exponential moving average (EMA), we said it would be a success to hold that level on 1 August. But Bitcoin has done one better, and closed 1 August above the even more important 33 EMA.

Impressive closesBTC chart by TradingView

This is extremely important, as the 33 EMA held the entire 2019 Bitcoin uptrend until the July retracement. Holding this level for the next few days would serve as a strong indication that Bitcoin’s brief cool-off period is over, and that an uptrend will resume on both low timeframe (LTF) and high timeframe (HTF) charts.

The story of the 33 EMABTC chart by TradingView

If we get down to the 4-hour chart, we see good strength across pretty much every metric - except perhaps volume. The 200 EMA on this chart roughly equals the 33-day EMA, and we see again that this level has been retaken; and it may form an appropriate level for a retest.

$10.6 resistance, volume is 'meh'BTC chart by TradingView

The level at and around $10,600 served as a swing point in the June/July market structure, and now serves as resistance. This is perhaps the last level to be retaken before we might seriously consider Bitcoin returned to a full uptrend.

The RSI has been steaming up with higher highs and lows; but at this point looks ready for a slight correction. We see that the histogram is also starting to ebb, with a lower peak and the start of a down arc. The one niggle in the charts perhaps remains the volume: despite retaking key levels, the lack of really strong volume leaves the final piece of the puzzle absent. Perhaps some consolidation here could change that.

Finally, looking at the wider view on the 3-day chart, we see the same picture. A very nice bullish engulfing candle has been painted on the most recent close; however, volume simply has not followed the bullish price action (Coinbase exchange).

Volume volume volumeBTC chart by TradingView

The RSI is flattening out after a period of decline, and the histogram is ticking up. But amid these positive signs, the lack of volume makes it hard to sign off on the moves up. More time above the 33-day EMA, and more volume coming in, may tempt more buyers back into the market.

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