Bitcoin Bull Run Sees Strong Confirmation
In the past eight weeks, Bitcoin (BTC) has rallied from $4,200 to $8,400, literally doubling in a time when global equities have been in a period of tumult. This strong performance has made many claim that crypto assets are decidedly in a bullish trend, marked by higher lows and higher highs in rapid succession. Do the technicals back this?
According to Josh Rager, a popular analyst and team member at exchange startup Level, yes. He recently remarked that the Super Guppy, an indicator that singles out overarching trends, has flipped from red to grey on Bitcoin’s one-week chart after it flipped from grey to green on Bitcoin’s three-day chart. This occurred when BTC pushed past $7,000 just weeks ago. While the one-week Super Guppy isn’t green yet, signaling a clear uptrend, Rager notes that Guppys are “lagging indicator”, meaning that the change from red to interim grey makes for a “strong confirmation” of a bull trend.
With this in mind, Rager went on to state that dips are for buying, looking to the fact that during 2017’s bull run, Bitcoin often saw 30% pullbacks, but rallied by 150% in the weeks and months that followed. He goes on to note that until Bitcoin closes a weekly candle under $5,500, he would be inclined to suggest that cryptocurrency remains in a bull market. As Rager quips, “Let’s not forget that we just closed out the strongest monthly candle on the Bitcoin since 2017.”
This isn’t the only confirmation of a bull trend that BTC has recently seen. Per Josh Olszewicz, an analyst at Brave New Coin, the 100 exponential moving average (EMA) and 100 daily moving average (SMA) on Bitcoin’s daily resolution has only crossed six times in BTC’s history as a liquid asset. Most recently, BTC’s 100 EMA has crossed above its 100 SMA, a “bull cross” according to Olszewicz. The last time this technical signal came to fruition (late-2015, pre bull run), BTC rallied parabolically in the months that followed, peaking at $20,000 as we know well know.
And most importantly, Bitcoin recently closed its fourth consecutive weekly candle above its 50-week moving average, a series of events that have never failed to mark a bull run in the past.
Some are sure that before a fully-fledged bull run starts though, Bitcoin may be susceptible to one more strong pullback. Per previous reports from Ethereum World News, BTC just closed its weekly candle rather, uh, weak. As pointed out by analyst Joe McCann, for the first time in four-odd weeks, BTC’s upward momentum has slowed dramatically, with the recently-closed candle looking rather skimpy. Or in other words, “the weekly chart [is] looking at bit out of gas for Bitcoin.”
What’s equally as harrowing is that there has been a large drop off in market volumes, signifying that bulls aren’t ready to pick up the slack, and shows signs of market indecisiveness. But more importantly, the weekly candle has taken the form of a Doji, a special candle formation that is marked by a skinny body (similar open and close price) and long wicks, meaning that the asset in question traded in a large range. Dojis often signifies the end of a trend. And with this Doji being long-legged, some are sure that the six-week bull trend that Bitcoin has experienced is coming to an end. As McCann suggests, there “may be a down week ahead.”
Title Image Courtesy of Jason Wong Via Unsplash