- Bitcoin’s recent price dips were halted along key weekly supports, previously resistances at $7,427 and 7,503 showing a higher low pattern that has begun to form on the weekly chart.
- The relative strength index and Chaikin Money Flow remain bullish despite recent market activity.
- If prices maintain their current position above $8,000 to $8,200, a continuation in BTC’s 2019 bullish trend is likely.
A $700 loss in value for bitcoin, the world’s premier crypto, on June 4 and June 5 sent tremors across the crypto markets with most traders turning bearish in the short-term.
Landing just above former August and September 2018’s weekly resistance at $7,427 on June 6, bitcoin (BTC) managed to defend the $7,400 price tag for two days, restoring bull confidence for another leg up beyond $7,600. From there, BTC broke above the $8,000 psychological price level to close out at $8,100 on June 10.
BTC is currently changing hands at $8,445 on the Coinbase exchange.
The weekly timeframe shows some interesting aspects in regards to the relative strength index (RSI) and Chaikin Money Flow (CMF) indicators as well as resistances flipped to support levels as a result from two and a half months of volatile trading.
BTC’s latest price pullback resulted in an RSI dip below overbought territory, opening up the possibility for continued growth northward in the mid-term. This is especially true when the reading is above 50 on the weekly timeframe, highlighting current bull market conditions.
Similarly, the CMF is displaying its highest readings since Nov. 27, 2017, an indication that strong buying pressure remains within the crypto markets and resembles similar conditions to that seen two years ago.
BTC’s price pullback was already anticipated, courtesy of a long-legged doji on the weekly chart, typically a reversal candlestick pattern of the current trend, however, the drawdowns seen on June 4 and 5 was negligible in terms of its overall market structure and trend.
Indeed, this is nothing new, in the lead up to and during the 2017 bull run, BTC suffered multiple corrections, forcing prices down by as much as 40 percent with many pullbacks along the way to its all-time highs near $20,000.
2019 Outlook – Monthly chart
This same time two years ago on July 2017, BTC was changing hands just above $2,300, demonstrating just how far the crypto markets have come despite 2018’s come down.
The two monthly candles, by comparison, are similar in that they both present wicks on either side during an uptrend, hinting at indecision before a big breakout.
So the story for day traders remains the same, protect your capital and don’t risk too much to the downside. Long-term investors, however, should continue their accumulation strategies that were maintained throughout most of the bear market in 2018.
If prices maintain their current position above $8,000-$8,200, then that would go a long way toward resuming its current bullish advance with its next target marked out on monthly resistances at $9,800-$10,000.
And last but not least, the cryptocurrency industry has continued to flourish amid favorable fundamentals with the likes of Facebook and Samsung entering the fray, just remember, the trend is your friend until it isn’t.
Disclosure: The author holds no cryptocurrency at the time of writing.
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