It's been over three weeks since my last update, and over the past week, bitcoin has made a nice recovery after hitting a low of just over $29k on July 20th. Bitcoin hit a high earlier today of just under $41k which is about a 40% increase in just over a week. Not too shabby!
Bitcoin Daily Chart
Looking at the daily chart you can see just how nice of a recovery it has been. You can also see the death cross that occurred just after the low set on June 22nd. I have to say that I am not too fond of the daily candle that is forming today. To me, it looks like a reversal candle but after 7 green candles in a row, I suppose it shouldn't be surprising that bitcoin might need to rest for a bit. What I would like to see is a short-term pullback creating a higher low and then a continuation of the uptrend.
Bitcoin 2018 Daily Chart
I would like to believe that this recovery means that the bottom of the correction has been set and that this could be the start of a new bull market. I want to keep in mind though that there were several very nice bounces during the 2018 bear market which all ended and resulted in bitcoin giving back all of the gains. Looking at the chart above of the 2018 bear market you can see where just after the death cross (yellow arrow) bitcoin bounced by over 50% before rolling over and heading lower again. You can also see that bitcoin pushed above both the 200 EMA (purple) and the 50 EMA (green) just as it has today.
What I would like to see from bitcoin moving forward is for the price to eventually take out the high set on June 15th, as of me writing this bitcoin is struggling anytime the price gets close to the $41k level. I really want to see bitcoin at a minimum be able to push above and stay above the $40k level, this is something that bitcoin has not been able to do since the severe pullback that occurred in the middle of May.
What I like when I look at the daily chart is that bitcoin is now above all of the moving averages and even the longer period moving averages are starting to curl upward. That will all be meaningless though if bitcoin can't hold over $40k and continue to push higher.
So, as of now, I am hopeful but also still aware that this recovery may just be a bear market bounce and that this bear market still may have a long way to go before it is over.