At the time of writing, it looks like a strong possibility that Bitcoin (BTC) has begun another leg up in its medium-term uptrend, which was started on 2-3 January. This is a pretty important development, as the buy support is helping to secure a breakout from a seven-month downtrend that Bitcoin has been trapped in; and the longer this keeps up, the more we can be confident in the ultimate destruction of that downtrend. In short, we are looking at the possible alignment of short, medium, and long term uptrends all up.
We can begin with the weekly chart, which closed last night. The first thing to note is price action, which has basically already broken free of the long downtrend, pictured here as a parallel channel. Last week, a corrective week in the local uptrend, saw only modest selling and plenty of buy support.
Price was held by the important 21 EMA, and we can note that the EMA “fan” is continuing a bullish reversion back to a positive configuration (smallest on top). We can also note the RSI prospering above a critical inflection zone from the last two years of Bitcoin’s chart. Finally, the histogram has started crossing positive. Simply put, the stars are aligning here for a reversal on the high timeframe chart.
Moving to the daily, we see that support came in over the weekend perfectly at the first clear support level within the medium uptrend. Buying has pushed BTC back to $8,600 and back into resistance; and again within striking range of the important $9,100 level.
Breaking through this red resistance zone with conviction will sound the death knell for the long term downtrend, and could easily lead to a retest of $14k.
Finally, we turn to the short term uptrend which began over the weekend. We see that the first leg of a short term uptrend is likely in, with some very short term charts showing overbought. But the rally already seems to be well supported, with energetic buying stepping in at every turn.
However, with the histogram arching down, we may expect a bit of a break after this first leg up during today’s trading.
In all, we are looking at the makings of a triple uptrend, on short, medium, and long timeframes. Most importantly, the medium uptrend is being supported – and dragging Bitcoin up and out of its 2019 H2 downtrend. The signs are bullish, for now.
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