What Comes Next...
I wonder if by now you have figured out the theme to the titles of my latest post... Today I wanted to use fewer words and more charts and best place to start is by identifying the main levels that matter. For this I used the monthly. Aside from the clear support areas, I have also added the yearly open and the quarterly open.
One interesting thing to notice is that August could be the first month that opens and closes above 11K. Now that is technically not that relevant, but I am sure it will give the bulls some emotional support.
Now let's zoom in to the weekly.
What is striking is the lack of retraces on the way up. That is one thing that makes me think this rise could run out of steam sooner rather than later, but so far it seems to have enough fuel. However, the S shape is not characteristic of an impulsive rise. This shape, more commonly called an ABC, is a corrective move. However, you could count it as an impulsive - and almost complete - 1st wave of a larger structure. It goes a bit far to explain that now. I will do an EW version next week and look into that more.
The daily shows that we are currently nicely supported by the 11 and 21 EMA (some use the 13 and 26), that we have broken out of what could be seen as a rising triangle and that we still have plenty of room on the RSI to play with. We are entering oversold, but we are not there yet. Stoch also has turned back up and is not showing a direct sign of reversal. Doesn't mean it can't happen, but no alarm bells go off immediately.
And of course, for old time's sake, have to end the BTC charts with the 12 hr. No sign of reversal here either. Looks healthy and the volume profile looks ok too. There is possible bearish divergence, but if RSI keeps rising that will not confirm.
So, what is the cause of all this. For that we need to look at the DXY IMHO.
The 12hr DXY chart shows that we have possibly broken below a trend line. If the value of the dollar decreases, all product paid for in dollars, like Bitcoin, get more expensive in dollars. Now the DXY is very much in bearish territory. So much so, that it is oversold on many timeframes. That said, it is resetting a bit giving room for a more substantial break down.
It is drawn with a bit of bias, but if we have indeed fallen out of this channel too, than the USD is setting up for a big correction. That would be good for Gold, Silver, stocks and of course crypto. It is 'fools profit', as they all gain strength against a weakening dollar, but if you play your cards right...
Anyway, as always, this is just one way of looking at the market. I believe the DXY chart is more important for the price of BTC than the actual BTC chart, but time will tell. Stay safe, trade safe and come find me on Twitter to discuss the price developments. https://twitter.com/htltimor
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