A high volume assault by bulls on the major BTCUSD resistance line at $7740 is underway this morning. Other than that, BTC is unchanged from last week, still probing the underside of the uptrend.
I'm going to zoom out slightly this morning though and break with tradition by looking at some other cryptos first. The composite picture is beginning to look rather interesting, I'll then return to BTC at the end.
What's piqued my attention is a redrawing of the downtrend in light of last week's action (magenta here). Such trendlines can be tricky with cryptocurrencies as the tendency for FOMO means there are several head fakes out of the top of the trend; however last week's top (coinciding with the blue 50 day moving average) clarified things nicely.
When added to the long uptrend dating back to last summer, the combination gives us a big squeeze and we're right in the apex. This tells me the market is about to make a decision:
- Either it's about to drop heavily, back into 'the danger zone' just below.
- Or we've already bottomed.
Drawing the equivalent down and uptrends gives us the same story here, another big squeeze, due to conclude sometime in the next fortnight.
Ripple is particularly interesting. It's arguably broken out of that downtrend and is back testing it from above.
Now, all three of the above currencies are still below the 50 and 200 day moving averages, and are hovering just above the 'danger zone' where there's scarce support - so major pinches of salt required. If this is the start of something it's very early days and there are battles ahead, and the picture could easily flip bearish. That's down to BTC.
Just to be coy, Bitcoin looks different to any of the above charts.
Note that Bitcoin broke below the bottom of its uptrend back in June (it is noteable, and maybe important that the market didn't follow suit). It is that uptrend that we are now backtesting (which is also the bottom of the shorter-term symmetrical triangle I mentioned last week).
More bullishly though:
- Like XRP, Bitcoin has broken north of the downtrend from the highs.
- Bitcoin is over its 50 day moving average.
What Bitcoin does next is crucial.
If it manages to crawl back onto the ledge that is that uptrend from the lows, defeating the $7740 resistance, then we could be looking at a bullish conclusion to the big squeezes we are seeing elsewhere, and the bulls start to make a decent case for a new attempt on the all-important 200 day moving averages (red on each chart - a reminder we are in a formal bear market while we are under that line).
If, however, bears manage to defend $7740 then a bearish conclusion to those market wide triangles is likely.
An interesting situation, which has me sitting up straight.
Zooming in to the 4 hour chart on BTC, the volume this morning on the assault on $7740 is tangible. Interesting times.
I'll update if things resolve intraweek.
BCB Group has no position or opinion on the price of Bitcoin or any other cryptocurrency and this article should not be construed as analysis of or advice regarding the current or future market price of Bitcoin or any other cryptocurrency. No analysis of the price movements of BTC or any other cryptocurrency or any other asset provided by BCB Group should be construed as an invitation or inducement to buy, sell or otherwise to trade BTC or any other cryptocurrency.
Strategy and Execution Partner
Jon is BCB’s head strategist, with an emphasis on market intelligence. An expert in behavioural science and highly experienced chartist, Jon has been providing BCB’s clients with crypto and macro technical analysis since 2017, and has quickly gained a reputation for accuracy after correctly calling the December 2017 top and August 2018 bottom.
Jon is also MD of British music production company Poseidon. He began studying technical analysis in 2000 due to its overlap with behavioural economics – much used in Poseidon's international marketing work, which has seen the company achieve three iTunes US number one albums among other notable successes.