It has been a few days since my last update and bitcoin has finally shown some bullish momentum. On Sunday bitcoin actually broke out higher out of the descending triangle that it has been forming for about three weeks. On Monday bitcoin continued to show bullish momentum as it pushed higher up to the 200 EMA.
Bitcoin Daily Chart
After contacting the 200 EMA on Monday and pulling back, bitcoin tried again on Tuesday to push above the 200 EMA but was rejected once again. On Wednesday bitcoin dropped further before bouncing Wednesday night and into Thursday morning. As I am writing this (Thursday morning) bitcoin continues to pull back and the big question now is, was that a false breakout or in other words a bull trap? It's very possible that bitcoin could just be pulling back to test the upper trendline that it just broke through which should now act as support. If that support does hold what I want to see is for bitcoin to create a sustained uptrend which will take the price of BTC back up into the distribution zone and ultimately to new all-time highs. Another thing that bitcoin has achieved by moving higher is to slow the decline of the 50 EMA which had been rapidly dropping and approaching the 200 EMA. If the 50 EMA does cross below the 200 EMA that is called a death cross and generally signals further price declines.
Bitcoin 4-hour Chart
Zooming in and looking at the 4-hour chart you can see that bitcoin has once again pushed above the 50 EMA. Since this correction began on May 12th when bitcoin fell below the 50 EMA, all previous attempts to push back above it have either failed or when bitcoin did push above the 50 EMA it could not stay above for very long. Now that the price has once again moved above the 50 EMA I want to see it stay above and for the 50 EMA to act as strong support as bitcoin pushes higher. As I mentioned earlier I want to see a sustained uptrend, since the low set on the 8th bitcoin is creating higher highs and higher lows, I want to see that continue.
Bitcoin Weekly Chart
I want to finish with the weekly chart. I realize there are still over 3 days until the weekly candle closes but I really dislike the way it looks right now. If it happens to close looking like it does right now I would be watching for an evening star pattern to possibly form leading to a reversal.
All we can do now is watch over the next few days to see if the upper trendline will act as support and launch the price of bitcoin higher again. Or if that support fails and bitcoin drops back into the descending triangle, leaving behind a failed breakout attempt and undoubtedly a bull trap.
As usual, most altcoins are just following bitcoins lead so as bitcoin was pushing higher most altcoins pushed higher as well and are now giving back most of those gains.
That's all I have for now. Take care!