- April 6, 2020
- Posted by: Tradingshot Articles
- Category: Cryptocurrency
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Last week Bitcoin made a new high, while almost completing three straight green closings on 1W candles. This is certainly a bullish signal, having also reached the 0.618 Fibonacci retracement level from the 10500 High, covering the largest portion of the March sell-off as seen on the chart below:
** The 1D MA1000 as Resistance**
What I want to bring to your attention today is the Moving Average which I believe is the most important catalyst for BTC during this recovery process. That is the MA1000 on the 1D chart. Why is it important? Because last time that level was tested as a Resistance was during the December 2018 – March 2019 Accumulation Phase. On its first test after the December 3200 Bottom, the Resistance held so that pushed traders into a 4 month accumulation process until the 2nd (early April) test, when the MA1000 finally broke and gave way to a 3 month relentless rally to 13800. That price was the 0.786 Fibonacci from the 19800 ATH.
So far the MA1000 is holding, having made its first test last Thursday. If it breaks I see no reason why that will not attract more buyers as it did in April 2019 and extend at least to the 0.786 Fibonacci which is conveniently on the last High at 10500. If the Resistance holds though, we may have another lengthy Accumulation Phase.
** The 1D MA1400 as Support **
On the bright side we have already one successful test of the MA1400 level as Support. It was the very same Moving Average that held twice (December 2018 and February 2019), keeping the 2018 Bottom intact. This time of course the situation is slightly different as the 2020 Bottom was made on the MA2000, but many view this as a price distortion due to the COVID panic sell-off on the stock markets (just like the May-June 2019 rally was based on wider adoption rumors). It is very positive that the MA1400 has been tested as a Support and (so far) held.
I must add at this point that I have mentioned the importance of those Moving Averages on a study made 3 weeks ago, with the addition that I compared it with the previous cycle as well:
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