As we anticipated here yesterday, Bitcoin (BTC) has entered an uptrend of so far indeterminate length and character. It is too early to say whether or not this LTF uptrend will eventually break the limits of the larger MTF downtrend, but we will outline those levels below.

Starting on the 4-hour chart, we see a perfect breakout yesterday after a series of bull divergences on the RSI, pretty much a textbook action. This is a classic relief rally after a downtrend, in this case both and MTF and LTF downtrend.

Looks like support for another leg upBTC chart by TradingView

Momentum on the histogram is turning back up within the positive side, for what looks like another round of bullish contraction of the EMAs. Price was bought up perfectly at the .618 Fibonacci level (the “golden pocket”), and also held the 21 EMA. An attempt at the 55 EMA (purple line) looks likely here.

Turning to the daily chart, the movement framed is the MTF downtrend / correction that has been churning since roughly Feb 13. This movement was looking like a rather tepid consolidation until breaking below the network of support, now resistance (red), between $9,400–8,700. When that happened, it became a full downtrend.

Let's not get excitedBTC chart by TradingView

Within that downtrend, we’ve found a local low; but here the open question is: is this a correction within the downtrend, or an end to the downtrend? The only way to confirm an end to this movement is to break it.

All of the market within the orange circle must be retaken in order to call an end to the MTF downtrend. This is a very long way away, and we’re nowhere near being able to think about that call. For now, we must assume the former: that this is a correction within the downtrend, and the next support at $8,300 will eventually be tested.

In the meantime, we should see at least a bit more upside. The 55-day EMA is a likely sell target on the way up from here.

The views and opinions expressed here do not reflect those of and do not constitute financial advice. Always do your own research.

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