Bitcoin (BTC) has been consolidating in a local bottom (notice, not the bottom) for the past week, after markets both crypto and traditional melted-down in response to effects of the COVID-19 pandemic. Now, it seems like it might break from that bottom after a progression of bull signals – but we should be careful not to expect too much out of any such rally.
Looking at the 4-hour chart, we see that Bitcoin is already breaking up at time of writing. $6,000 was the precise lid on the local market, and we’ve seen a steady progression in bullish indicators throughout the week, as well as a volume break in the last few hours.
We have to be very careful here, though. Bitcoin suffered its second-worst price collapse in its history a week ago, which means there are likely to be more sellers lined up than panicked supermarket shoppers, ready to try and recoup some of their losses.
Looking at the daily chart, we see the first resistance level will top out at $6,800, and we can expect this rally to stop there in the best case. It seems pretty likely that a medium-term trend is pointing down and will need another test of the regional bottom.
The histogram is progressing nicely, however, with a smooth bullish contraction accelerating. If it closes with this accelerating profile today, we might expect a bit more out of this counter-rally.
But again, we must be aware of the possibility that there are legions of underwater traders and investors waiting between here at $8,000. With the growing consequences of the COVID-19 virus, there hasn’t been this much uncertainty in global markets in, perhaps, decades.
In that light, Bitcoin’s HTF trend remains completely unknown at this time, with its MTF trend not much clearer.
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