- September 16, 2020
- Posted by: Tradingshot Articles
- Category: Cryptocurrency
So it appears that Bitcoin successfully defended all possible Support levels, both the Higher Low trend-line of the 1D Channel Up (chart 1) and the 2 year bearish trend-line (chart 2) as seen below:
If you think that was the easy part, you are mistaken! BTC traders have to reclaim the 1D MA50 (blue trend-line), in order to attract back the short/ medium-term bullish sentiment.
** The importance of the 1D MA50 **
This is the most important test on a 1 month basis and I will explain why. Since April 16, every time the 1D MA50 broke from below and made a 1D candle close above it, BTCUSD rallied aggressively. In fact, in two cases, the rally was +43% (April 16) and +33% (July 08) from the break-out and closing level. If the decreasing rate on the rallies is arithmetic, does that mean that if the price breaks and makes a daily close above the 1D MA50 again, the new rally will be around +23%? That is possible of course but tough to make the projection as if the MA50 break will indeed bring a rally, that could fall into the very volatile pre-U.S. election period. Therefore much will depend on how the stock markets will do.
** The LMACD **
At this point it is useful to note that the LMACD just made a Bullish Cross. Last time it did so was on July 06, when the price broke (marginally though, the full candle close came two days later) the 1D MA50 from below. After a few days of consolidation within the 1D MA50 and the Higher Low trend-line of the Channel Up, the +33% rally took place.
In conclusion, the technical outlook remains bullish for Bitcoin and based on the current study we are on the most optimal buy level. The move just needs to be confirmed by the potential 1D MA50 cross we discuss. So what do you think? Is the 1D MA50 test that important and if so, will a full candle close above it deliver a strong rally? Feel free to share your work and let me know in the comments section!
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