Bitcoin Price Analysis
We’re going to start with the daily resolution.
Looking above, it seems pretty clear that Bitcoin is in a bull pennant.
Bull pennants are bullish continuation patterns and, as such, they dictate that the price will eventually break out after a brief period of consolidation. This is a hit or miss pattern in the crypto world, I’ve observed. However, for those that are bullish on Bitcoin, this is something definitely worth observing.
Corresponding Low Volume
Relative Strength Index (14)
The Zerononcense RSI Filter (custom) has not signaled a buy yet, but we can see that its turning back. Its still pretty high on this chart (60+ value), so the momentum is still heavily in the favor of the bulls according to this RSI reading.
Assuming that the RSI(14) maintains this change in direction, then it can be said that the most recent low is higher than the one that was preceding it. That’s always a major sign of continuation of an uptrend in any asset class.
We’re going to continue to monitor this to check for further progress. It is rare that the RSI immediately reverses course. But we’ll make sure to adjust for this if we decide that we’re going to set a bullish R/R in our trading idea later on in this piece.
Balance of Power RSI
As we can see from the Balance of Power RSI, there was a major downturn in the indicator, which tells us that buy pressure was waning significantly and that sell pressure was increasing as well.
However, it appears that, at least temporarily, this indicator has met a ‘resting point’. Like the RSI(14) on the daily resolution (which we looked at above), we’re going to have to see how this indicator progresses over time.
Looking at One of Our Older Charts
Remember when we were looking at the progress of $BTC before? We stated that the overhead resistance would be at $8.2k.
This is an old chart with markings from the previous Bitcoin price analysis that we passed off a few days ago.
None of the markings have been moved, but additional price points from the subsequent days since the chart was originally posted have been added in. As one can see from the picture above, the overhead resistance did hold up. This is worth noting as we move forward.
Adding an Underlying Support
Let’s check out the underlying support point at $7.3k (this was not marked on the original chart, but we’re going to look at it and acknowledge it now):
MACD & Zerononcense Reversion Ribbon
We’re going to look at the MACD, but this time it won’t be overlaid on the price chart like it usually is.
Check out the picture below:
Below is the Zerononcense Reversion Ribbon:
Interestingly, the Zerononcense Reversion Ribbon (custom) is indicating high sell pressure despite the consolidation of recent daily candles (including the current one).
This is definitely worth noting when considering the reduction of volatility over the past few periods.
We can see a slight indication of convergence in the last few bars of the Histogram…but nothing that signals that there may be a major impending reversal of fortune.
Third Consolidation Cycle
Since Bitcoin has had its big price run in 2019, there has been three consolidation cycles (if we include the one that we’ve been in briefly).
Below is an illustration that shows this consolidation cycle in full:
Length of Time For Each Consolidation Period
Below is a chart that shows the length of time for each consolidation period (including the third one, which we are currently in):
- First consolidation period = 36 days
- Second consolidation period = 34 days
- Third consolidation period = 13 days thus far
This Pattern is Known as the ‘Bullish Three Drives’ Pattern
This is not a pattern that is often spoken about in trading, but it is valid and it has occurred numerous times throughout Bitcoin’s history and may be very important to factor into your crypto trading strategies.
As stated in the header ^ , this pattern is what’s known as the ‘Bullish Three Drives’ and it typically goes like this:
A more accurate reflection of what we’re seeing with Bitcoin’s current price action can be found here:
As the source of the picture above states, buying the breakout is a critical factor in winning trades.
Thus, while there has been a notable pattern and it seems a third breakout is almost inevitable at this point, patience must be exercised.
So let’s go back to our chart and see what our best plan of action would be:
Viewers should note that the ‘Peaks’ have been labeled in this most recent iteration of the price action.
Before we go too much further, we’re going to look at a potential danger point for Bitcoin.
Evaluating the Increasing Angles of Price Growth
Since the inception of the most recent price run, we’ve seen Bitcoin undergo various legs where the price growth has increased at an accelerating angle. As a result, additional underlying supports have been created:
What is interesting is that the most recent support, while steep, is actually still holding.
However, it is nearly beyond the realm of comprehension for the price to continue to increase at such a rate (+57%/26 days) indefinitely.
The rate is shown below:
This is compared to the previous rate over the same time frame (rough estimate):
However, it is not impossible. Bitcoin saw a comparable rate of growth and even higher rates during the 2017 bull run (notably during Q4).
- Source: First Appeared Here
- Published Time: 2019-05-26 16:50:22
The views and opinions expressed in the article Detailed BTC Chart Analysis Reveals USD Value Could Shoot Up Another Leg do not reflect that of 48coins, nor of its originally published source. Article does not constitute financial advice. Kindly proceed with caution and always do your own research.
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