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Bitcoin Update for May 9th, 2021

So, first off before I get started I want to say Happy Mothers day to all the moms out there and happy Sunday to everyone else!

Looking at the 4-hour chart as I kind of expected bitcoin was rejected from the latest resistance level yesterday. Bitcoin then slowly drifted lower overnight before making a quick drop down to $56,265 (Coinbase) early this morning. Bitcoin did end up bouncing off of a trendline that runs up from the April 25th low and the May 4th low. The 4-hour 200 EMA was right there also so it's possible that the bounce was more off of it or it could have been the combination of both. We'll just have to wait and see if this bounce continues or if BTC rolls over and drops lower. Even if the bounce continues though, BTC is going to have a rough time between this resistance and the $60k level that sits right above it. We need to also keep in mind that we are dealing with bitcoin here and as we have seen in the past it can make sudden powerful moves higher, so the possibility exists that BTC could just blow through both at any time.

If bitcoin continues upward it's also possible we see a situation where BTC bounces between the resistance and the trendline getting squeezed tighter and tighter until it breaks one way or the other. Looking at the overall price pattern we can see that it has been tightening up and in my opinion, at some point, it most likely will make a violent move one way or the other. Of course, I am hoping that move will be upward!

Bitcoin 4-hour Chart

Bitcoin Daily Chart

Looking at the daily chart we can pretty much see the same thing as I described for the 4-hour chart so I don't have too much more to add. I do like the upward slant of both indicators with the MACD looking the most bullish. We can also see just how close the resistance and the $60k levels are to each other. Looking left we can see just how much trouble BTC has had in the past getting above them. When it has managed to push above $60k, so far BTC has been unable to stay above for very long. I get the feeling though that if bitcoin can breakthrough that it may lead to a very violent move upward.

Bitcoin Weekly Chart

Looking at the weekly chart we can clearly see the sideways consolidation with BTC sitting comfortably above the 7 EMA. I would really like to see both indicators start looking more bullish, especially the RSI which has been trending downward for months. It will most likely take a decent size move higher to break this downtrend.

Ethereum Daily Chart

Moving on to Ethereum and looking at the daily chart we can see that ETH made a very strong move higher yesterday and last night. Ethereum has pulled back a little along with bitcoin but is still very close to the all-time high it set yesterday. We can also see that ETH has become a little overextended above the 7 EMA so it would not surprise me to see ETH pause here or even pull back some to close that gap.

Ethereum went through its own consolidation phase from about the end of Feb. to almost the middle of April before finally breaking out. Since April 25th when bitcoin hit a low of just above $47k ETH has made a very strong move higher and really took over leading the market higher as BTC has been resting. I am sure at some point bitcoin will once again take over leading the market but I also believe that ETH will remain one of the market's leaders.

Cardano (ADA) 12-hour Chart

One altcoin that has been in a consolidation phase for over 2 months is Cardano (ADA). Looking at the 12-hour chart though we can see that the consolidation is over. We can see the strong move higher allowing ADA to break out, and the multiple re-tests of the breakout level before ADA pushed higher again. The measured move from this breakout in my opinion is up around $2.10.

For the time being bitcoin remains rangebound and trapped below the $60k level. My opinion is that it is only a matter of time until this consolidation ends and bitcoin continues its push to new all-time highs. But for now, the roller coaster ride continues.



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