Bitcoin (BTC) has closed out another week of gains, after briefly peaking over the important 5-digit price level of $10,000. In the short term, and perhaps even in the medium term, we are likely in for a downtrend. But the HTF indicators remain bullish.
Starting on the weekly chart, we see some exceptionally bullish signs. We have lately outlined here the presence of a VHTF (very high timeframe) downtrending resistance on the Bitcoin chart, drawn from the 2017-18 peak of $20,000, and over the more recent $14k peak from 2019.
During last week’s continued bullish movement up, Bitcoin has driven about halfway through this zone. This seems like an extremely important accomplishment, because if Bitcoin can succeed in overcoming this resistance zone, there is very little left keeping it from the highs of $14k and $20k, and beyond.
We also see here that the EMA fan is now completely bullish again, after threatening to break down in late 2019. This is certainly a reversal of fortune, as the EMA fan had been looking ready to collapse only a couple of months ago, and bring down with it Bitcoin’s gain potential during 2020.
If we take a look at the weekly indicators, we see more generally bullish signs. First, the RSI has climbed to the top of the historic, wide limit between bull and bear Bitcoin markets. During full-on bull markets, BTC has climbed above this gray band and retraced back into it. It looks very much like this band will be broken soon and serve as support.
Also, last week saw an accelerating bullish histogram movement, preserving this week’s potential for more gains.
Finally, moving to the daily chart, we first note that Bitcoin has run right into previous resistance just under $10,500. This has, predictably, provoked some selling and profit-taking. There is nothing bearish about this, and some consolidation within the blue support zone would be healthy.
We note on the RSI the absence of any bearish divergence on this important chart. This will certainly help Bitcoin in the coming month to maintain strength. The histogram is threatening to roll over on today’s candle, which, again, would not be the end of the world.
In sum, Bitcoin is still looking fantastic. Although we could see some selling and consolidation here (indeed, we should welcome it), we can now conclude that the bear market of H2 2019 is over, and that we are very likely within phase 1 of a bull market that could last all of 2020.
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