Bitcoin [BTC] continued its impressive break out over the weekend as well as it broke above the $5700 mark reaching this year’s high. The price of Bitcoin at 5: 45 Hours UTC on 5th May 2019 is $5799.
A leading trade analyst, Murad Mahmudov, has created a long thread of analysis of Bitcoin from here. According to him, $5400 is a critical support level for Bitcoin which it must hold above for further continuation of the bull run.
Nevertheless, while he was mostly bullish on Bitcoin, he cited a few negative signals as well. The most striking amongst them was Willy Woo’s NVTS signal.
Mahmudov was mostly bullish on Bitcoin [BTC] from these price levels. He gave numerous perspective analysis to stand his case. On the 4-Hour Chart, he suggested that Bitcoin price has been forming an upward consolidation pattern and has turned $5400 from resistance to support. He tweeted:
Resistance flipped support on this order book. 4 Higher Highs. 3 Higher Lows. As the urban legend goes, consolidation patterns that break out upwards.
From the weekly chart, he pointed to a Bitcoin-specific analysis from the Relative Strength (RSI). Traditionally, an asset is considered overbought when the RSI crosses above 70. However, Bitcoin is a new asset class which is significantly affected rather positively due to the fresh influx of volume regularly. Hence, Mahmudov identified a long-term S/R line on the weekly RSI at 60.
On the daily chart, he tweeted,
This is speculative on my part, but if the above is right, we could see something crazy like this:
Furthermore, he suggested that the daily RSI also broke above the bearish trendline. From the Bollinger bands, he suggested that Bitcoin has found support near the half-way Moving Average 20 line, which is a bullish signal.
The Bitfinex Premium has been a concern for the traders as even after a week the arbitragers haven’t diluted the difference in the price of Bitcoin between Bitfinex and other Exchanges. Bifinex Premium w.r.t. Coinbase at 5: 45 Hours UTC on 5th May 2019 is $343.
Willy Woo’s famous Network Value to Transactions Ratio (NVT) signal was also brought into the light, however, this time on the bearish side. In the past, an intersection between the NVTS line with the price has usually been identified as a bottom.
Moreover, this comes an update the earlier version which had reported an intersection which suggested that ‘bottom is in.’ However, if a cue is retaken from this signal, it indicates that the bottom is close but not achieved yet. He noted two other “market indicators” pointing towards a pullback: trendline conspiracy theory and tensorcharts resistance.
According to him, bearish action might resume temporarily. However, he was bullish on it in the long term.
“Then, if we go below 5400 then it’s more consolidation before the next sharp movement.”
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