Market Round Up – Fake News

Bulls have managed to score quite a coup, confirming our suspected inverse head-and-shoulders bottom.

Bitcoin

BTCUSD daily chart
Chart 1: Bitcoin daily

Yesterday’s surge was on high volume intraday, with most of the move happening in two hours. A look at the daily chart shows that volume-wise these are still early adopter eager-beaver bulls rather than the whole market turning bullish yet.

This move has had a couple of significant effects on the picture:

  • It’s moved the action back above all of the major support bands that it had fallen through (turquoise). Bulls can breathe easier – temporarily at least. Saying that, there is significant overhead resistance just above at $7750 and $8200 (red dashed), and of course the big one – the 200 day moving average, currently at $8895.
  • It’s pushed BTC over the 50 day moving average (blue) for the first time since April.
  • Overnight, BTC responded to resistance around $7700, confirming the underside of an arguable uptrend from the lows (blue arrow). We can add a complimentary downtrend, putting the action this year within a symmetrical triangle dating back to February (pink here).
  • With symmetrical triangles, volume is essential to confirm the ultimate conclusion (up or down). A common scenario is a fake-out in one direction followed by a higher-volume conclusion in the other.

The red arrow shows the volume as we left the triangle downwards; while decent, this wasn’t earth-shattering, so if bulls manage to get above the resistance lines AND the 200 day moving average AND better this volume, it’s possible that the recent move down will be proven to be a head fake.

But that’s a big but. There are a LOT of headwinds above for bulls to pull that off, especially when daily volume isn’t really on their side yet.

  • Alternatively this could simply be a retest of the triangle from below, before a continuation down.

This isn’t a situation to make a strong call in, the market has some decisions to make and there are some bull/bear battles to be had. Until proven otherwise I’m still seeing this as noise within a bear market. I’ll add commentary at any important junctures.

One last point – it’s always good to remember basics:

We’re not in a bull market until the 50 day moving average (blue) is back above the 200 (red). We’re a way away from that yet.


DISCLAIMER

BitcoinBro has no position or opinion on the price of Bitcoin or any other cryptocurrency and this article should not be construed as analysis of or advice regarding the current or future market price of Bitcoin or any other cryptocurrency. No analysis of the price movements of BTC or any other cryptocurrency or any other asset provided by BitcoinBro should be construed as an invitation or inducement to buy, sell or otherwise to trade BTC or any other cryptocurrency.

One thought on “Market Round Up – Fake News

  1. Ruby Cook says:

    I think the price of Bitcoin is high yesterday but this is just a little high not large hike so, this is not a good news. I was invested 50 BTC in 2016 but right I felt regrate on that.

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