BTC Analysis 5/2/2020
Hey guys, Happy Sunday! A quick update on BTC...
After that exciting little rally last week, we topped out at around 9400, and settled into a range between about 8600-9000. This is a pretty heavy resistance zone, as indicated by the VPVR as well as the big overhead trend line starting from the highs posted in July 2019. I had mentioned a few days ago in the group that we would probably see a few days of consolidation here and that seems to have held true. The big question is...what comes next? Do we smash the overhead trend line right in time for the halvening? Do we get rejected and go back to retest 7.5k, 6k, or even 4k?
That's a tough question to answer, so I would like to give a few scenarios...
There is clearly heavy resistance at and above 9k, which the bulls have yet to really break. There was big volume moved in this area and the resistance held. There looks like the beginning of a divergence on the RSI, but still very early to tell on that one. I am keeping my eye on the upper end of this zone (9400-9500) for more rejections. One more retest and failure to break above this zone, with another divergent top, would spell bad news for the bulls, and could easily send us back down to retest 8300, 8000, then 7500. Finding support at any of these levels would a good sign and could help give the bulls another chance to break that big downtrend. A breakdown past 7500, and I could see us go back to retest the yearly low. I know its hard to imagine now at nearly 9k, but until that big downtrend is broken, I'm not convinced we're going into a bull market.
Now if we were to see a surge of volume come in and break over that big trend-line, I'd say its game on. With the halving coming up, I am sure a lot of people are expecting something like this to happen. But I get worried when a lot of people expect a certain outcome, as smart money has a way of playing off the hype. Staying cautious with everything going on and not letting FOMO get you is probably my best advice at the moment.
I will keep my eyes on the charts and give you guys another update when something big happens.
Take Care
After that exciting little rally last week, we topped out at around 9400, and settled into a range between about 8600-9000. This is a pretty heavy resistance zone, as indicated by the VPVR as well as the big overhead trend line starting from the highs posted in July 2019. I had mentioned a few days ago in the group that we would probably see a few days of consolidation here and that seems to have held true. The big question is...what comes next? Do we smash the overhead trend line right in time for the halvening? Do we get rejected and go back to retest 7.5k, 6k, or even 4k?
That's a tough question to answer, so I would like to give a few scenarios...
There is clearly heavy resistance at and above 9k, which the bulls have yet to really break. There was big volume moved in this area and the resistance held. There looks like the beginning of a divergence on the RSI, but still very early to tell on that one. I am keeping my eye on the upper end of this zone (9400-9500) for more rejections. One more retest and failure to break above this zone, with another divergent top, would spell bad news for the bulls, and could easily send us back down to retest 8300, 8000, then 7500. Finding support at any of these levels would a good sign and could help give the bulls another chance to break that big downtrend. A breakdown past 7500, and I could see us go back to retest the yearly low. I know its hard to imagine now at nearly 9k, but until that big downtrend is broken, I'm not convinced we're going into a bull market.
Now if we were to see a surge of volume come in and break over that big trend-line, I'd say its game on. With the halving coming up, I am sure a lot of people are expecting something like this to happen. But I get worried when a lot of people expect a certain outcome, as smart money has a way of playing off the hype. Staying cautious with everything going on and not letting FOMO get you is probably my best advice at the moment.
I will keep my eyes on the charts and give you guys another update when something big happens.
Take Care
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