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My Bitcoin Analysis for May 5th, 2021

Updated: May 6, 2021

Okay, I had just completed my charts for today when bitcoin decided to make a real nice push higher so I had to redo them all. Which is fine, I would rather have to redo them after bitcoin pops higher instead of after it had dumped. Speaking of dumps, since I posted the update yesterday bitcoin did dump over $3000 hitting a low of $53,000 on Coinbase. However, since hitting that low, it has recovered over the last 12 hours.

Anyway, looking at the first 4-hour chart I created before the pop you can see how bitcoin had recovered and pushed back above the point of control and was pushed right up against a whole cluster of moving averages, with only the 7 EMA below it.

Bitcoin 4-hour Chart

New 4-hour Chart

Now, looking at the 4-hour chart after the pop you can see that once bitcoin pushed through the moving averages it really took off higher. Even though this is a real nice move higher I still want to see BTC take out the high from the 3rd in order to keep this uptrend intact.

Bitcoin Daily Chart - Before BTC Popped

First, we'll look at the Daily chart I created before bitcoin popped higher. At that time BTC was above all of the moving averages except the 21 EMA, it was also sitting just below the point of control. You can also see that it had made a nice bounce off of the low but was still in danger of not having the momentum to push above the POC which could have sent it back down.

Bitcoin Daily Chart

Now looking at the daily chart after the pop you can see that BTC easily pushed above the POC which now should act as support. Bitcoin is still about $1200 below the high set on the 3rd but as we know can close that gap very quickly. Looking to the right you can see that there are still some pretty heavy volume nodes that BTC is going to have to work is way through so it won't be easy. We can also expect a little pullback after such a nice move higher, possibly to test the POC support.

Bitcoin Weekly Chart

Looking at the weekly chart you can see that after taking a dive below the 7 EMA bitcoin has made a nice recovery and is now sitting back on top of the 7 EMA. It's when looking at the longer time frames that you can really see just how incredible bitcoins run higher since October has been. I like how all of the moving averages are still moving in a steep upward direction, even the 7 EMA has turned up again. You can also see how the price has flattened since about the first week of March. In my opinion, this is very healthy after such an insane move higher. Consolidation periods are very necessary and healthy after extreme moves higher, the longer BTC can consolidate above $50k the better.

Bitcoin Monthly Chart

Finally, looking at the monthly chart, which also looks crazy! You can see that bitcoin has become quite extended above the 7 EMA. Typically when this happens the asset needs to pause or even pull back to close the gap. I have extended the 7 EMA (yellow) on a path I feel it may take to show how far BTC would need to move to regain contact. Of course, this is just my opinion but looking back in time there are many examples of this happening. Although, a pull back would not be fun to go through it would be healthy in the long run. Also, as I mentioned BTC could just trade sideways for a period of time to allow the 7 EMA to catch up, and actually, this has already been happening for over a month so this may indicate that the consolidation phase needs to go on for a while yet. Even though the shorter-term time frames may look very bullish I give more weight to the longer time frames.

Bitcoin Dominance vs Altcoin Dominance

The last thing that I want to look at is bitcoin's market dominance vs all of the other altcoins' dominance. Looking at the chart you can see that they have clearly crossed as bitcoin has been consolidating while many altcoins have surged higher. The altcoin dominance is still pretty far below the peak set in early 2018 but is climbing pretty fast, and bitcoin has been diving pretty fast but also is still a ways from the low it set in early 2018.

Both are also approaching my caution zones which is where I will become even more vigilant at watching for signs of a market top. Anyway, I think that is all I have for now except to say how crazy this crypto market can be, it's like being on a roller coaster. One day everything is pumping then the next day the market is a sea of red. It's all part of being involved with cryptocurrencies and although some days aren't too much fun I wouldn't want to be anywhere else.



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