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- Bitcoin Technical Analysis
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- Bitcoin – Falling Wedge and Bullish Momentum
Bitcoin priced in US Dollar was strong at the end of June , rallying from around 555 to almost 660 before consolidating.
BTC/USD 4H Chart 7/8
(click to enlarge)
The 4H chart shows a falling wedge developing in July since the 658 high. First of all the prevailing upswing could be assessed as part of a large triangle that has been developing since June. But you can also argue that June’s consolidation was over since price has pushed above an earlier triangle trendline. Also consider that before June, there was a strong bullish push in May. With that said, the current falling wedge consolidation is in the middle of a neutral to bullish market. A bearish outlook should be shelved until a break below the triangle, and the 550 level. For now, the, the April high at 658.50 is in sight, especially if price pushes above the falling wedge.
Also note that the 4H RSI has pushed above 70 and is now testing 40. If the market is to remain bullish, look for the 4H RSI to hold above 40. Then if price can push back above 630, we are likely to see a bullish breakout from the falling wedge pattern, which should signal bullish continuation at least toward the April high of 658.50.
BTC/USD Daily Chart 7/8
(click to enlarge)
The daily chart shows a market that has been sideways in 2014, after retreating sharply from the 2013 high at 1163. For most of 2014, price was trading under the 50-day SMA. The aforementioned rally in May crossed above the 50-day SMA. The crossover, and the subsequent test of it as support in June act as bullish signals for btc/usd.
A break above 630 therefore not only exposes the April high, but would continue May’s bullish attempt, which can open up toward the 700 handle, and the March high around 710.
Also note that the RSI in the daily chart has popped above 80 in June, and has stayed above 40 since, which reflects building of bullish momentum. As the RSI pushes above 60, it will reflect bullish continuation momentum.
Previous Post from Author: USD Dollar Index – Head and Shoulders Pattern vs. Rising Trendline, FOMC Preview (7/8)
July 08, 2014 at 10:47AM
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