Bitcoin Still Looks Hot
Over recent days, Bitcoin (BTC) has stagnated. After crashing to $4,950 late last week, BTC has steadily ground higher, trading between $5,150 and $5,300 for the past 72 hours without as much as a hitch. And interestingly, some traders have deemed this indecision bearish, as trading activity across the crypto-board has begun to decline.
In fact, one analyst, going by “Magic Poop Cannon” on Twitter, remarked that the lack of strong activity “painted half of an enormous evening star Doji pattern.” For those who missed the memo, an evening star is a reversal pattern, in which there is a large uptrend (seen last week), stagnation (this week), and reversal. A Doji candle is one in which its opening and closing price are effectively the same, signaling indecision in a market. If this “evening star Doji” pattern plays out as Magic expects, Bitcoin could see a 15% to 20% drop to $4,100 in the coming ten days, and then sell-off even further, potentially to the mid $3,000s, to finish this formation.
But, another investor claims that this non-action is actually bullish, not bearish. In a recent blog post, Joe DiPasquale, the chief executive of crypto fund BitBull Capital, claimed that BTC “consolidating above $5,000 could lead to further price appreciation.” DiPasquale explained that while his firm doesn’t believe that a 2017-esque rally is in crypto’s cards, the foundation is currently being built for a move higher in the long run.
On the matter of the recent move, he claims that the fact that Bitcoin has managed to hold above $5,000 range following a move that could be deemed “not organic or steady in nature,” is remarkably a good sign. DiPasquale adds that if this accumulation continues for “one to two more weeks,” a rally to $5,500 may be in store.
Crypto UB, a popular trader, echoed the thought process put forth by DiPasquale. The commentator opined that the longer that BTC holds around and above $5,182, the more likely a move up to the blue range, $5,500 “seems likely.”
BTC Poised To Head Higher?
Interestingly, however, some are convinced that BTC will head even higher than $5,500. Crypto Thies, a Seattle-based trader who commands a following of over 26,300, claimed that the two-week Moving Average Convergence Divergence (MACD) measure has turned green, as the indicator’s signal lines have convincingly crossed over. The last time the Bitcoin’s two-week MACD looked as it does now, BTC was trading at $240 apiece, and the market was looking to recover from a large sell-off.
In a subsequent comment, Thies further explained why he is leaning bullish on BTC. Citing his proprietary Market God indicator, which has accurately called crypto bottoms and tops historically, Thies noted that it recently issued a “buy” for the first time since 2015, right near the bottom of the previous bear market. He added that the fact that the 30-day exponential moving average (EMA) and 90-day EMA had crossed for the first time since January is another bullish sign, as it accentuates that bears are seeing their hegemony evaporate.
With this in mind, coupled with a combo analysis of Keltner Channels and Bollinger Bands, Thies determined that a rally “straight to $8,000 from where we are, without retesting lows” is possible, barring that BTC holds above $4,800. He added that his year-end target for BTC is “near $8,000,” if the current uptrend and overall recovery stays its course.
Photo by Austin Distel on Unsplash