- August 3, 2021
- Posted by: Tradingshot Articles
- Category: Cryptocurrency
What do the above candle closings on the weekly and monthly time-frames tell us? In my opinion quite a lot of information.
The weekly (1W) closing came after holding the 1W MA50 which has been the Support for over 1 year now (since late April 2020) after Bitcoin recovered from the COVID March 2020 flash-crash. The fact that the 1W MA50 held and kickstarted a 2 week rally is bullish enough as it is.
On the monthly chart, the first green candle since March 2021 comes with a price range of nearly +45% from bottom to top though considerably lower +19% if measuring just the candle’s body. Still that was enough to take BTC to test the 0.382 Fibonacci retracement level for the first time since the correction of May.
So far though the price hasn’t touched the 1D MA200 but the last time BTC (almost) hit the 0.5 Fibonacci retracement during a correction was in January 19, 2020. During that phase, the price broke both the 0.5 Fib and the 1D MA200 at the same time and went on to recover above the 0.618 Fib. If it wasn’t for the March 2020 worldwide collapse of risky assets (which as I’ve mentioned before was an abnormal, non-technical event as it was caused by a once in 100 years pandemic), it is natural to assume that the recovery would have continued into the more controlled fashion of May – September 2020, until it broke upwards parabolically.
Based on the model above, what is important now is to see the 1D MA50 hold and the 1D MA200 break. A break of the 0.618 Fib should start preparing the next parabolic phase as the 1D MA200 turns into a Support again, but right now it is a bit too soon to talk about that.
What do you think will happen next? A bearish week that will test the 1D MA50? A bearish month that will see us test the 28-29k Support Zone? A second straight bullish month that will break the 1D MA200? Feel free to share your work and let me know in the comments section!