Bitcoin Price Analysis: The Running of the Bulls (Week of July 6)

Bitcoin Price Analysis from CoinTelegraph

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Bitcoin Price Analysis: The Running of the Bulls (Week of July 6)

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BTC price at press time: US$271.39

The fiestas of San Fermin are celebrated in Pamplona, Spain every year from July 6-14. The event has become internationally renowned because of the running of the bulls, where the bulls try to gore wanna-be matadors through the streets of the city's old quarter. Meanwhile, Bitcoin, too, is experiencing a bull run and as of this writing has broken through the 200 day EMA, the last big hurdle in its way.

Last week’s price alert began with:

“The price reached a high of ~US$252 and has now come down to ~US$249 and thus far the price has been consolidating above these two moving averages, which it has been doing since it broke out. This remains a bullish sign. Price is also above the ~US$243 where it started last week. This consolidation along with many key indicators should be seen as bullish. However price remains below the 200 day SMA at ~US$253 and the 200 day EMA at ~US$271. These both continue to act as resistance.”

The price in last week’s article was US$249 and rose approximately 11% to where it is now. Everything was in line for a bullish breakout, and the bulls seized the opportunity. Price broke above ~US$253 and is now at a big resistance level the 200 day EMA, which is ~US$271. Getting above this and consolidating would be extremely bullish. As has been said many times, bitcoin trades heavily on sentiment and technical analysis, so news from Greece leading up to a “no” vote on the referendum, and the Shanghai imploding, have certainly helped price over the last few weeks.

Long Term

Price had been consolidating above the 50 & 100 day EMAs for some time after breaking above them, which was a bullish sign. Now price is right up against resistance at the 200 day EMA (~US$271) and looking to break above it. Doing this should pave the road for a test of the US$300 area. Something else bullish is also occurring. The 50 & 100 day EMAs are about to make a bullish crossover. This is what one wants to see if a real bullish picture is to emerge. Right now, the 200 day EMA is above the 100 day, which is above the 50 day. If bitcoin is to start a major uptrend, the 50 EMA will need to be above the 100 EMA, and the 200 EMA should be at the bottom. This is something to watch.

The RSI is in very bullish territory and is overbought presently. This may be a point where price rests and unwinds this condition. Nevertheless, RSI is on a buy signal. 50-55 look like the support area in RSI right now. The Money Flow Index is also on a buy signal and in bullish territory. OBV is actually starting to move after being stagnant for months on end. A line of resistance has been drawn through the OBV chart, and getting above that line would be very bullish.

Ichimoku

The one-year Ichimoku (cloud chart) shows price remaining well above the cloud (trend is bullish) and in very bullish territory. Ichimoku is a trending indicator, so the longer we stay above the cloud, the more likely the trend is changing. In fact, the cloud ahead was already bullish last week, but has begun to widen and rise. This is another bullish sign of a trend change happening. It could indicate that this long consolidation range that the bitcoin price has been in is about to end in bullish fashion.

The Tanken Sen and Kijun Sen are both above the cloud, indicating the price should continue in the direction it is going. The Chikou Sen (Lagging Line) has finally broken through the cloud, and since it’s a very lagging indicator, its confirmation shows this move may have some legs in it.

For further definitions of what is being discussed, please refer to this previous post on Ichimoku cloud charts.

Intermediate-Term Trend

Fibonacci retracements have been drawn from two price tops: the mid-November high of ~US$424 and the mid-March high of ~US$298.

Price has broken above resistance levels to the upside. As mentioned above, breaking above ~US$271 appears to be the final hurdle before a bigger move above can occur. This could pave the way for ~US$276 and ~US$295.

The Fibonacci Line drawn from the November high confirms that ~US$265 is key for a bull run. As of now, we remain above this level and price is poised to move higher. It certainly appears that a test of the ~US$300 level is in the cards.

On the downside, price needs to hold ~US$255 within a consolidation. The 50 & 100 day SMA/EMA is in this area as well, so it’s an important threshold. If these don’t hold, it will be time to reassess the trend that is forming. But this isn’t anything to worry about right now.

MACD is at its highest level since March, and is on a buy signal. RSI, as mentioned above, is bullish too.

Included is the Directional Movement Index (DMI), which looks at buying and selling pressures. The blue line indicates buying pressure, the red line indicates selling pressure, and the orange line is the ADX, which indicates the strength or weakness of a trend. 

Buying pressure and the ADX line are very bullish and at their highest levels since last November, while selling pressure has dropped to its lowest levels since last November. The bulls are in total control right now. The ADX line remains above both the Buying Pressure Line and the Selling Pressure Line at very high levels. This puts it on a buy signal. Price has moved and appears like it could go another leg higher.

The price is now above the upper Bollinger Band, which could mean it’s time to rest and assess its new level and get comfortable there. Look for the Bollinger Bands to widen if price starts taking off. The B-bands are bullish here, but the price needs consolidation. The other positive here is that the bands are starting to form an uptrend channel for the first time since November as well.

Short Term

The short-term price seems stretched here and could look to consolidate before challenging the 200 day EMA at ~US$271. There is support at ~US$265 and ~US$260 short term. The RSI is overbought here and needs to consolidate before a move higher. The same goes for the MFI and the MACD. These are all on short-term sell signals, but this is nothing more than a condition of the price surging on strong demand and needing some respite. 

It looks like it might be time for the bulls to start running. Getting above ~US$271 makes this picture very bullish. Buying on dips can be initiated, but waiting for price to consolidate above ~US$271 would be a better opportunity to take a position. Pullbacks should be seen as buying opportunities, unless newfound support is breached.

When price talks, it pays to listen. The bulls are seizing control.

Disclaimer: Articles regarding the potential movement in cryptocurrency prices are not to be treated as trading advice. Neither CoinTelegraph, nor the author, assumes responsibility for any trade losses, as the final decision on trade execution lies with the reader. Always remember that only those in possession of the private keys are in control of the money.

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