After an impressive increase since mid-February, which has caused Bitcoin (BTC) to trade 177% above the annual lows in December 2018, the main cryptocurrency based on market capitalization is likely to spend momentum upwards. With this, there is little certainty about the possibility of BTC exceeding the USD 9,000 barrier, without first making a local minimum in the area of greater liquidity for purchases, such as the range between USD 6,600 and USD 7,000.
Spot BTC prices are against gravity since April, when cryptocurrency has a push to push prices from USD 5,000 to USD 9,000. Institutional demands, US and Chinese trade wars, and potential Chinese capital flight, can be a key driver in the pressure of purchases which takes prices too extreme.
However, as cryptocurrency continues to increase, the need for setbacks becomes clear. Contractions in movement, or better called corrections, allow oxygenated prices, looking for support points in historical support, and accumulate enough strength for the next push.
In the following graph, we observe how prices reduce buyer impulses. When prices increase in his career to $ 9,000, green candles start to become smaller and with a greater degree of doubt. Breakthroughs in parabola, accompanied by red candles with volume, as shown in the graph, are what operators want to define end of expansion and initial contraction.
In the same way, Ichimoku Cloud can be interpreted with multiple configurations, for more precise signals. In seasonal seasonality, bitcoin continues to present a bearish outlook, but with a high probability target towards USD 10,000. However, this type of trend is indicated by having a Kijun (red line) and Tenkan (blue line) that are close to the price action. When this distance, the possibility of overbought and returning to its midpoint (kijun) increases rapidly. During a period of strong growth, Kijun will serve as a basis for determining potential regression points.
Currently the kijun is approaching USD 6,600 which should act as a magnet for prices in the event of a setback. In this case, the historical volume (horizontal bar) indicates that each retreat from the price will find liquidity, and may not exceed the range of USD 6,300 to USD 6,500.
In the daily chart below, the metric with Ichimoku Cloud is still 100% bullish: the price is above the cloud, the cloud is bullish, the kijun and Tenkan are cross bullish and the delay interval is above the price and cloud.
Break of the relative strength index (RSI) trend line (in the chart below) marks the end of the bullish movement. As stated in the chart, the RSI has presented a higher minimum since December 2018, however, On May 31, the trend line was broken, giving way to correction in the indicator. Although he has retreated to the minimum level in a few weeks, he is still in bullish territory (above 50 points) so the momentum remains optimistic.
Finally, in the 4H season, price action marks support and resistance in a strong way. After the expiry of the CME futures on May 31, the market appears to have entered a bearish volatility boom that leads to bitcoin to a small lateralization between USD 7,500 and USD 8,250.
On previous occasions, a break of USD 8,250 has brought a single volume to move prices above or below, so it is expected that a breakout in the area must be accompanied by the same buying burden (being the case now) to witness an increase in organic assets.
Although the trend is very bullish, technical analysis in a longer time frame shows signs of overbought conditions and a declining upward momentum. In a lower temporality, the price sets a bearish continuation pattern, indicating the possibility of an increasingly large setback.
If we add a decrease in the Long vs. Shorts Bitfinex index to 1.0 (with a maximum of 1.55) and the level of decline in Bitmex financing in the past two weeks, the sentiment towards sales can continue to lean around. USD 6,600 and USD 7,000. As long as resistance from USD 8,000 – USD 8,250 is not violated, it is likely that a correction will occur.
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