BTC Likely To Continue Testing Recent Uptrend
Bitcoin daily chart
Bitcoin (BTC) has been performing well since its previous low, up about 13%, but is in a tight spot. It is possible prices reach as high as $9,174.82 (i.e., the 200-day moving average) given certain outcomes. However, it’s likely BTC continues to test this recent uptrend.
The red 20-day Bollinger Band (BB) base line crossed above the orange 50-day moving average (MA). The price had been testing the 50-day MA since Bitcoin’s birthday (i.e., 01.03.2009; the genesis block) and finally closed above the 50-day MA a few days later. A good sign. An even better sign was the price closing above the upper BB two days in a row. This was followed by two red candles, one of which (i.e., yesterday’s candle) closed below the upper BB. It is very important today’s price close above the upper BB (i.e., $8,088.71).
The On Balance Volume (OBV) has been moving upward since Christmas last year. This is a good sign of increased buying pressure. However, the buying pressure peaked along with the price 3 days ago. The OBV is currently pointing upward which is good but I would like to see the OBV move to or beyond its most recent peak. This will likely occur if the price closes above the upper BB.
The Relative Strength Index (RSI) was approaching overbought territory and barely missed the upper band. This could suggest there is still room for upward momentum. However, the RSI has been showing upward momentum since November 24, 2019. This makes me wonder whether BTC indeed has been overbought or not. Again, if the price closes above the BB, I suspect the RSI will break into overbought territory.
The Chaikin Money Flow (CMF) has been hovering along the zero dotted line. This could suggest that buying and selling are balancing out. However, there is a selling bias given that the CMF is still below the zero line. The CMF will likely test or surpass the zero line again if BTC closes the day at or above $8,088.71
The current candle is green and the OBV, RSI, and CMF are all pointing upward. Things are looking good for Bitcoin right now. However, the candle is below the upper BB. It is very important that the price close above the upper BB. At the very least, the price could close at the previous candles high of $8045.8. If this occurs, Bitcoin would have additional wiggle room and another day to attempt and close at or above the upper BB (i.e., $8,088.71). If it does close above the upper BB, I prefer it close at or above the recent high of $8458.20. This would give me a more confident outlook on the next few days. Alternatively, Bitcoin could retest the red 20-day moving average line (i.e., aka the BB base) area of $7436.43 or lower levels. Finally, it would be nice to see the OBV and CMI moving upward. The RSI I am neutral about. Oversold territory would likely occur with a pump. If it does hit this area, there is an increased likelihood of moving towards neutral or oversold territory. I prefer to see steady upward momentum over any sudden movements.
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