Bitcoin Price: Bulls Driven by China as Weekly RSI Nears 2013-Levels
The daily chart also shows a Golden Cross as the 50 day EMA has moved above both the 100 day and the 200 day EMA. This is a bullish sign.
Last week’s article stated:
“This could lead to a blowoff top and the price collapsing as the move gets more extreme. However, it’s hard to tell right now at what price this could happen. Prices tend to go higher than one thinks they will and fall lower than one thinks they will as well. For now, the trend continues up and is looking very strong. Watch those indicators for signs of more strength before divergences become noticeable.”
The bull trend continues to look very strong. 13 of the last 15 days have been green leaving the price as of this writing at US$340. The indicators all remain overbought and extremely elevated. A blowoff top seems to be forming but that can take the price much higher than here. As noted, when the indicators start to diverge from price, it could be a top forming for now that has not happened. As the chart below shows all the indicators are at yearly highs. Price has also moved out of the top of the Bollinger Bands, which shows it’s moving into an extreme position.
The daily chart also shows a Golden Cross as the 50 day EMA has moved above both the 100 day and the 200 day EMA. This is a bullish sign. The 100 day EMA is getting close to moving above the 200 as well.
Looking at the weekly chart, the price action is bullish as well. The price is above the 50-week, 100-week and 200-week EMAs. However, the RSI is moving into an overbought position where it has not been since Willybot and the Mt. Gox run-up/blowoff top. This could be another sign that the price is about to move into a blowoff-top exhaustion phase relatively soon.
As has been noted before, China continues to drive the run-up in price as volume and price continue to lead. As has been stated in previous articles, this is a combination of speculation as the price and volatility have both increased, and a way to evade the government’s capital controls. Below are a couple of charts from two Chinese exchanges showing abnormally high volume driving the bullish trend:
For now, as price continues to move higher, there has not been much consolidation in this up move, which has led the indicators to overbought levels. While a pullback would be healthy, it may not come before the price moves higher and higher. In the event of a pullback, areas to watch for support are US$310, US$300, and US$290. For now, expect price to continue its surge perhaps into the final U.S. Marshals Bitcoin auction.
Keep your eye out for the next resistance levels at US$350 and US$375, though every major point of resistance has been blown right through and this may be the case if the price continues surging with high volume.
Price at time of writing: US$340