• Francisco Hernandez

$9,850.50 is Bitcoin's (BTC) new year-to-date (YTD) high

BTC-USD, BTSE


Overview

Bitcoin (BTC) has made a new year-to-date (YTD) high at $9,850.50! That is, Bitcoin has made a new YTD high... so far. Bitcoin has been rallying up since the low on February 4th, 2020. This area at the low, as seen in the 15-minute chart below, is acting a support level (green).

BTC-USD, 15m, BTSE, Support, 02.06.20.


Fibonacci Retracements and Extensions

Bitcoin's (BTC) previous high was at $9,739.20 (grey). This area is currently being tested as support or resistance. With the current candle, it is acting as support. However, should the candle fall below, then it will act as resistance. Depending on the outcome (i.e., support/resistance), Bitcoin also has the following support and resistance levels at the 23.6% Fibonacci retracement/extension level (red) at $9,583.32 and $9,913.08, respectively.

BTC-USD, 15m, BTSE, Fibonacci Retracements and Extensions, 02.06.20.


Bollinger Bands (BB) and Moving Averages (MA)

Bitcoin (BTC) is currently testing the high of $9,850.50, which was located outside of the upper Bollinger Band (BB; white). This candle pattern is characteristic of on M-top. To confirm this, the coming few candles must close below the upper BB. For final confirmation, the candle must break the reaction low (i.e., ~$9,731) located around the middle BB (red; aka 20-day moving average). If the M-top is confirmed, Bitcoin will be expected break down to lower levels of support, such as the 50- (orange) and 100-day (yellow) moving averages (MA) or the 23.6% Fibonacci retracement level at $9,583.32. However, if the M-top is not confirmed then Bitcoin could continue the uptrend and perhaps hit the $10,000 area. Let's consult with additional indicators to get a better idea about Bitcoin's current behavior.

BTC-USD, 15m, BTSE, Bollinger Bands and Moving Averages, 02.06.20.


On Balance Volume (OBV)

The On Balance Volume (OBV) has been making higher highs and higher lows. The most recent high, however, failed to make a new high. Notice how the OBV is taking on the shape of that M-top I mentioned before. The second peak is lower than the previous. This indicates an area of resistance and increased selling pressure. Despite this, the OBV line is starting to point back up and is making a higher low. I would like to see increased buying pressure as indicated by the OBV making a higher high. I have also plotted the support line from the recent low in green for reference.

BTC-USD, 15m, BTSE, On Balance Volume, 02.06.20.


MACD

The MACD is currently located above the zero line, having recently emerged a few hours earlier. It appears as if the MACD line (blue) has also topped off, making a lower move than it did previously. Additionally, the MACD line is pointing downwards toward the signal line (red). Given the current selling pressure as indicated by the OBV, it is likely that the MACD line will meet the signal line. If so, Bitcoin will be looking for support in the lower levels mentioned in the BB and MA section above. In a best case scenario, the MACD line will bounce off the signal line and make a higher high.

BTC-USD, 15m, BTSE, MACD, 02.06.20.


Chaikin Money Flow (CMF)

The Chaikin Money Flow (CMF) is suggesting some divergence, as it is currently pointing upwards and is located above the zero line. This indicates a positive money flow and increasing buy pressure. Additionally, the current trend (green) has yet to be broken. If this trend continues, then Bitcoin would move with upward momentum. Let's go back to our candle chart for the conclusion and see how Bitcoin is behaving now.

BTC-USD, 15m, BTSE, Chaikin Money Flow, 02.06.20.


Conclusion

BTC-USD, 15m, BTSE, Pennant, 02.06.20.


As suspected, the Chaikin Money Flow (CMF) has pointed out some divergence and Bitcoin now has a green candle, fighting the bears with a hammer-ish candle. Given that the M-top formation is currently not in play, I plotted a pennant continuation pattern. I slightly adjusted it, plotting the end of the lower green pennant with the 20-day moving average. I expect some more sideways movement anywhere between the green pennant. For a continuation, I would like to see the all the indicators start to point upwards and make higher highs, especially the OBV. I would also like to see the price break the previous high of $9,850.50. Additionally, the candle would close above the upper pennant line. Bitcoin is going to need more buying pressure to continue its movement upward towards $10,000. However, all the indicators are currently pointing downward. This must change. Should a pull back occur, I expect the ~$9,739 to act as support. Should this support level break, Bitcoin is looking at support from the moving averages below it, such as the 50-day MA at ~$9,680 or the 100-day MA at ~$9,640. Farther movement down may take Bitcoin near ~$9,583 (i.e., the 23.6% Fibonacci level). Should it break to the upside, Bitcoin could hit the $10,000 area by close of day.

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