The second full week since Bitcoin’s (BTC) massive collapse has now closed, and the open question still stands: is a bottom in? Although the leading crypto has surged well since then, there is not enough clarity on the charts, nor in the global news cycle still transfixed by COVID-19 (which clearly affects Bitcoin very much), to make any comfortable assessments. Meanwhile, in the short term, we are today seeing a bullish start to the week.
We start on the weekly chart, which remains an unusual chart owing to the recent black-swan-level volatility. Technical analysis is slowly becoming viable again – in times of such momentous price action, a market ceases to be structurally digestible and becomes purely a function of mass emotion.
We see that price is surging as the week begins, after selling off hard toward the end of last week. Normally this would have been a bearish candle, but, again, we must bear in mind the times. The histogram here looks like it is beginning to accelerate in a bullish contraction; it would need to, in order to start undoing the EMA damage: both the 8 and 21 have crossed under the 55, a sharply bearish outlook.
On the daily, we are seeing a solid progression of higher highs and lows. If the LTF uptrend that seems to have started today is going to continue, we are going to need to see another higher high on this leg of the RSI.
Another viable sign of a LTF uptrend would be a close above the 8 EMA; if we see a rejection there today, we are probably just seeing a corrective wave of a LTF downtrend, rather than a new uptrend.
So the situation is this: we are not sure if a MTF bottom has been put in, and we are seeing Bitcoin tease a LTF uptrend. Today’s daily close should tell us a lot, whether or not it’s just a tease, if we are going to see more downside back near the local lows.
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