БиткоинДлинная
Bitcoin Weekly Analysis: Important Support.
Hi, I’m David and I write one of the most read columns in the Netherlands about Bitcoin on a Dutch crypto platform for several years now. As of now I will also share my columns on TradingView. I hope you enjoy! More info about me you can find in my bio.
Last week it finally happened! The 200-day Moving Average (MA) was broken upward with a lot of force and the price of Bitcoin surged to $ 9500 on coinbase. A resistance that I indicated as the next important resistance in my previous analyzes. By crushing the 200-day MA, all major Moving Averages haven been broken to the upside. I'm talking about the 200-, 50 day and the 21 week Moving Average. I was of course bullish for a long time and when Bitcoin's price went into the $ 6XXX zone, I thought it was the best time to go long and to increase positions. At that time my arguments were mainly based on my personal analysis that the underlying trend was bullish as a result of observing that the upward action was stronger and more aggressive than the downward action where the price of Bitcoin slipped slowly away and with little volume. In addition, there was of course strong support in the $ 6XXX area and it was that combination that made me so bullish at the time. By breaking important resistances and Mas over the last few weeks, however, we now also have proof on the chart that the trend is bullish and, as I described last week, I think that the brakes are now off for Bitcoin! Anyway, the fact that I think we're just on the eve of a big rally doesn't mean we're going there in 1 straight line. In fact, there are few things that are certain and that I can guarantee in trading, and this is one of them: while the trend is bullish, the price will see rallies and pullbacks! I mainly trade the weekly and monthly charts and the art of surfing a long trend is not to grab your profits too quickly and not to panic in a pull-back. In those long waves, in my view, is where the real money lies and to get that you need a healthy dose of confidence to stay put when it gets exciting and it is now exciting because with an open-interest of more than a billion on Bitmex and the fact that the price of Bitcoin is moving against the resistance of $ 9500, we are about to shoot up (on the way to the resistance of $ 10400) or first make a retrace. Yes indeed. The price can go up or down (go figure). Anyway, it doesn't matter because as you may know I always do scenario planning and I am prepared for any outcome of the $ 9500 battle.
In figure 1 I have shown the daily chart of Bitcoin on coinbase and the first thing I notice is that a bullish flag has formed on this chart. The fact that the price of Bitcoin is consolidating at such a high level after the previous rally is a positive sign for me. At the same moment we can see from the wicks at the top of a number of daily candles last week that the resistance around the $ 9500 is not small but that at the same time the support on the $ 9200 level is also strong. The bulls and bears are in a stand-off. As a result of the previous rally, the bullish trend and the formation of a bull flag, I do give the bulls the benefit of the doubt.
In the above figure we also see that after a very long time the 200-day MA (orange line) is finally flattening out (since the price of Bitcoin moved north again off the 200-day MA it is expected that the 200-day MA will be upward sloping within the foreseeable future as long as the price remains north off it off course) and we also see that the 50-day MA (blue line) that was broken some time ago now has a lot of momentum. It will probably not be long before we see a golden cross (50-day MA breaks the 200-day MA). Anyway, most people know that the chart looks bullish. However, the momentum indicators on both the daily and weekly charts show that the power of the bulls is decreasing somewhat (this is also reflected in the consolidating candles) and that the volume is also decreasing. The fact that the price is pushing against the resistance at $ 9500 leaves a possibility open for a short pullback. If a retrace would take place, I will first look at the $ 9200 zone. This is because this level is the lower limit of the bull flag and in addition this level has acted as strong support several times in the past week. However, should the price break downward through this level and actually make a close below this level (on the daily chart), I would immediately look at the support zone around $ 8800-9000. In order to maintain strong upward momentum, I personally think it is important that the $ 9200 is maintained because as long as that level persists, the bullish flag is still fully intact, and I believe there will be sufficient confidence to break the $ 9500 AND $ 10400. In that scenario the price of Bitcoin would reach five-digit values again, and that should sound like music to most people, I guess. Anyway, back to the scenario where the price of Bitcoin makes a pullback. If the $ 9200 doesn't last, I would - as I just indicated - immediately look at the zone around the $ 8800-9000. In my view, this zone must hold because in addition to the fact that the $ 8800 is an important support level anyway, this level also includes the 200-day MA! A retrace back to the 200-day MA where support would be confirmed on the 200-day MA would also be a good scenario (in addition to keeping the bull flag intact) because this scenario would confirm that breaking the 200-day MA wasn't just a lucky shot but that the 200-day MA is here to stay and that in the coming period the market can have confidence that there is strong support at this level. Since I am bullish and since the trend confirms this, it believe it is wise to go long on the dips. Should the price fall back to a level of $ 9200 and find support on this level, then this can already be a good moment to increase or open positions. For the real short-term trader this is a good idea anyway because they can of course trade the flag whereby positions are opened and closed on the bottom and top off the flag. A break downward through the $ 9200 with subsequent support on the 200-day MA would, in my view, lead to the best entry and be truly a bonus. It would create a situation where a Stop-Loss can be established very well (take into account any wicks that may form but look at a level of $ 8500-8600 for the S/L, for example) and would also be a great position for breaking $ 10k+ levels. A break through the 200-day MA would make the whole chart rather bearish (although there would still be hope at a few other levels which I will share in case that happens), certainly if the 200-day MA will start to act as a resistance afterwards, but so far there are no signs of this and I do not see this happening quickly.
On the other hand, a move upwards through the $ 9500 would open the road to first the $ 10000 and then the resistance around the $ 10400-10600. Personally, I think that as soon as the price breaks the $ 9500, the $ 10000 is also virtually broken because the price of Bitcoin is naturally attracted to this level. The challenge will mainly be in the zone around $ 10400-10600 because around this level we can see clearly on the weekly chart (but also on the daily chart) that there is fierce resistance (Figure 2).
A break upward through the $ 9500 would therefore automatically make me look at the zone around $ 10400-10600. Shorter-term traders could secure some profits in this zone.
Although the momentum indicators are on the high side, there is still ample room for direct continuation of the rally. It would not surprise me if the current bull flag holds and the rally immediately continues its hunt for the $ 10k and then the level above that at $ 10400. On the other hand, a retrace up to the 200-day MA would not be bad news either, as confirmed support at this level will pay off considerably in the longer run because a market with confidence reaches higher than a market that is restless and continues to rise without confirming important support. All in all, I am and remain bullish and I would certainly not panic from a small pull back (as long as the 200-day MA lasts!). It will be an exciting week because I think there will be a lot of volatility! Enjoy your day and see you next week!
Last week it finally happened! The 200-day Moving Average (MA) was broken upward with a lot of force and the price of Bitcoin surged to $ 9500 on coinbase. A resistance that I indicated as the next important resistance in my previous analyzes. By crushing the 200-day MA, all major Moving Averages haven been broken to the upside. I'm talking about the 200-, 50 day and the 21 week Moving Average. I was of course bullish for a long time and when Bitcoin's price went into the $ 6XXX zone, I thought it was the best time to go long and to increase positions. At that time my arguments were mainly based on my personal analysis that the underlying trend was bullish as a result of observing that the upward action was stronger and more aggressive than the downward action where the price of Bitcoin slipped slowly away and with little volume. In addition, there was of course strong support in the $ 6XXX area and it was that combination that made me so bullish at the time. By breaking important resistances and Mas over the last few weeks, however, we now also have proof on the chart that the trend is bullish and, as I described last week, I think that the brakes are now off for Bitcoin! Anyway, the fact that I think we're just on the eve of a big rally doesn't mean we're going there in 1 straight line. In fact, there are few things that are certain and that I can guarantee in trading, and this is one of them: while the trend is bullish, the price will see rallies and pullbacks! I mainly trade the weekly and monthly charts and the art of surfing a long trend is not to grab your profits too quickly and not to panic in a pull-back. In those long waves, in my view, is where the real money lies and to get that you need a healthy dose of confidence to stay put when it gets exciting and it is now exciting because with an open-interest of more than a billion on Bitmex and the fact that the price of Bitcoin is moving against the resistance of $ 9500, we are about to shoot up (on the way to the resistance of $ 10400) or first make a retrace. Yes indeed. The price can go up or down (go figure). Anyway, it doesn't matter because as you may know I always do scenario planning and I am prepared for any outcome of the $ 9500 battle.
In figure 1 I have shown the daily chart of Bitcoin on coinbase and the first thing I notice is that a bullish flag has formed on this chart. The fact that the price of Bitcoin is consolidating at such a high level after the previous rally is a positive sign for me. At the same moment we can see from the wicks at the top of a number of daily candles last week that the resistance around the $ 9500 is not small but that at the same time the support on the $ 9200 level is also strong. The bulls and bears are in a stand-off. As a result of the previous rally, the bullish trend and the formation of a bull flag, I do give the bulls the benefit of the doubt.
In the above figure we also see that after a very long time the 200-day MA (orange line) is finally flattening out (since the price of Bitcoin moved north again off the 200-day MA it is expected that the 200-day MA will be upward sloping within the foreseeable future as long as the price remains north off it off course) and we also see that the 50-day MA (blue line) that was broken some time ago now has a lot of momentum. It will probably not be long before we see a golden cross (50-day MA breaks the 200-day MA). Anyway, most people know that the chart looks bullish. However, the momentum indicators on both the daily and weekly charts show that the power of the bulls is decreasing somewhat (this is also reflected in the consolidating candles) and that the volume is also decreasing. The fact that the price is pushing against the resistance at $ 9500 leaves a possibility open for a short pullback. If a retrace would take place, I will first look at the $ 9200 zone. This is because this level is the lower limit of the bull flag and in addition this level has acted as strong support several times in the past week. However, should the price break downward through this level and actually make a close below this level (on the daily chart), I would immediately look at the support zone around $ 8800-9000. In order to maintain strong upward momentum, I personally think it is important that the $ 9200 is maintained because as long as that level persists, the bullish flag is still fully intact, and I believe there will be sufficient confidence to break the $ 9500 AND $ 10400. In that scenario the price of Bitcoin would reach five-digit values again, and that should sound like music to most people, I guess. Anyway, back to the scenario where the price of Bitcoin makes a pullback. If the $ 9200 doesn't last, I would - as I just indicated - immediately look at the zone around the $ 8800-9000. In my view, this zone must hold because in addition to the fact that the $ 8800 is an important support level anyway, this level also includes the 200-day MA! A retrace back to the 200-day MA where support would be confirmed on the 200-day MA would also be a good scenario (in addition to keeping the bull flag intact) because this scenario would confirm that breaking the 200-day MA wasn't just a lucky shot but that the 200-day MA is here to stay and that in the coming period the market can have confidence that there is strong support at this level. Since I am bullish and since the trend confirms this, it believe it is wise to go long on the dips. Should the price fall back to a level of $ 9200 and find support on this level, then this can already be a good moment to increase or open positions. For the real short-term trader this is a good idea anyway because they can of course trade the flag whereby positions are opened and closed on the bottom and top off the flag. A break downward through the $ 9200 with subsequent support on the 200-day MA would, in my view, lead to the best entry and be truly a bonus. It would create a situation where a Stop-Loss can be established very well (take into account any wicks that may form but look at a level of $ 8500-8600 for the S/L, for example) and would also be a great position for breaking $ 10k+ levels. A break through the 200-day MA would make the whole chart rather bearish (although there would still be hope at a few other levels which I will share in case that happens), certainly if the 200-day MA will start to act as a resistance afterwards, but so far there are no signs of this and I do not see this happening quickly.
On the other hand, a move upwards through the $ 9500 would open the road to first the $ 10000 and then the resistance around the $ 10400-10600. Personally, I think that as soon as the price breaks the $ 9500, the $ 10000 is also virtually broken because the price of Bitcoin is naturally attracted to this level. The challenge will mainly be in the zone around $ 10400-10600 because around this level we can see clearly on the weekly chart (but also on the daily chart) that there is fierce resistance (Figure 2).
A break upward through the $ 9500 would therefore automatically make me look at the zone around $ 10400-10600. Shorter-term traders could secure some profits in this zone.
Although the momentum indicators are on the high side, there is still ample room for direct continuation of the rally. It would not surprise me if the current bull flag holds and the rally immediately continues its hunt for the $ 10k and then the level above that at $ 10400. On the other hand, a retrace up to the 200-day MA would not be bad news either, as confirmed support at this level will pay off considerably in the longer run because a market with confidence reaches higher than a market that is restless and continues to rise without confirming important support. All in all, I am and remain bullish and I would certainly not panic from a small pull back (as long as the 200-day MA lasts!). It will be an exciting week because I think there will be a lot of volatility! Enjoy your day and see you next week!
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