Bitcoin Update for May 17th, 2021

Happy Monday everyone! The correction in the crypto market continues, bitcoin is trying desperately to hang onto the $43k level.


Looking at the 4-hour chart you can see that there has already been one 4-hour candle that did close below $43k but bitcoin has since fought back and is now for the time being back above $43k. We can also see that bitcoin had this same struggle at the weekly 21 EMA and ultimately it failed to hold so there are no guarantees that $43k will hold either.


Bitcoin 4-hour Chart


I'm really not seeing any signs of improvement in the RSI or MACD on the 4-hour time frame. I have to go down to the 1-hour time frame before the indicators show any bullish signs at all.


Bitcoin Daily Chart


Looking at the daily chart we can see that bitcoin has made a nice bounce off of the daily 200 EMA. Looking left we can see that in January bitcoin went through a correction of about the same magnitude which culminated with bitcoin bouncing off of the $43k level. Bitcoin is currently fighting to hold that level and has actually bounced back up to the $44k level but it's too early to know if this is just a temporary bounce or if bitcoin has really found a bottom.

Bitcoin has actually been in a downtrend since hitting the all-time high on April 25th. As time passes we will find out if this is just another lower low in the downtrend or if this could be a turning point for bitcoin.


Bitcoin Weekly Chart


Looking at the weekly chart we can see that bitcoin has broken below the 21 EMA, the last candle did end up closing above the 21 EMA so we will have to see where this candle closes on Sunday. In my opinion, a close below the 21 EMA does not mean the death of this bull market but if we get several closes below I will have to reaccess my thoughts on this bull market based on the price action at the time. If the $43k level doesn't hold I believe the $39k level would probably be the next stop for bitcoin. Beyond that, the absolute lowest I would really want to see bitcoin reach would be around the weekly 50 EMA, which is near $32k.


Bitcoin Monthly Chart


Taking a look at the monthly chart we can see that bitcoin is still above the 7 EMA but after being pretty extended above it has come down to contact it for the first time in several months. Looking at this chart it is also easy to understand why bitcoin needed to cool off for a while. Before last month there were six large green candles in a row, that is just something that could not be sustained. A rest every now and then is much healthier than bitcoin just running straight up for an extended period of time. Usually, price action like that only results at some point in a price crash. We may well see price action from many different coins and tokens towards the end of this bull market in the form of a blow-off top.


I want to also say that this correction wasn't really a surprise, based on bitcoin's past history I was just waiting for a huge pullback and for bitcoin to touch the weekly 21 EMA. Where we go from here is still sort of up in the air in the short term, although, my feeling is nothing has changed and once this correction has run its course bitcoin will once again lead this market to new all-time highs.


Take care!

BigskyCrypto

info@bigskycrypto.com



















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