TA today in early May showing the bulls are back in town med to long term
Bitcoin continues its bullish trend, as the upwards trending channel appears to be evolving since the last big spike upward a month ago. All of April has been a consolidation of the bitcoin price. On Bitfinex we have seen bitcoin attempting to peak around $5600, a new local high. Of course this is a bit elevated in price compared to other exchanges due to Bitfinex using Tether, which is currently slightly divergent from the dollar and from the other stable coins, causing this premium.
On the daily chart bitcoin is still looking bullish, despite the appearance of a possible retracement due. The Stochastic and the RSI on the daily show a bearish divergence forming, despite price continuing to rise. Also the RSI on the 4 hourly chart also shows a little bit more upside possible before a retracement. As it’s Friday now, there may be some more exiting upside potential before the weekend, when volume decreases significantly. The weekend can be volatile of course, with prices more easily manipulated during the decreased volume.
You may have heard the old stock market motto “sell in May and go away.” Since May is here, I wonder what it means? Any experienced traders can leave a comment for us below. I presume the idea is that one sells the high in May and goes on holiday while price retraces. Then one returns from holiday with price much lower and buys back in by June, for example.
Curiously bitcoin transactions are on the rise overall, adding to strengthened fundamentals. Simultaneously transaction costs are particularly low lately. These are excellent indicators together, of a bullish trend. More trading is emerging once more suggesting the bear market is over. Traders are back and eager to make profit trading the increasing price of bitcoin this year. With increased volume price can be pushed even further upward. Next stop the Moon!
Realistically there may be a little more retracement ahead this May but remember that we are now one year away from the halving in May 2020, where miners receive half the reward compared to before. Between now and then price should rise significantly. Another halving due is that of Litecoin, coming in August, just three months away. This is the prime bullish time for LTC as a result. You may have noticed Litecoin (LTC) really pumping at the moment as we move toward the halving of miner rewards. Similarly bitcoin will pump until its May 2020 halving and slightly thereafter before retracing again..
As the current bull run matures beyond next year’s halving, price should climb to new ATHs in 2020/21. The golden cross is in – the 50 day MA crossing up above the 200 day MA – so up is the natural direction from here in the mid to long term. Short term is still uncertain. There are so many variables now, and also it differs from one bull run to the next, so we are following the 2014/5 pattern but will always be unique and different from the last time. Patterns and fractals do play themselves out repeatedly and cyclically but new variables must be considered.
The shorts on bitcoin are on the rise again, which also suggests that the crowd, the herd, are expecting a retracement to the downside in the short term. Of course there is often the contrary reaction from bitcoin price, fooling us all, or at least most of us. But this year the bull run is back, it has already started to a degree, and bitcoin is really up this year from the low reached in December around $3200. Not to worry though because now is still a great time to buy in, even if there is another last little dip in price to retest the local lows, possibly just above $4000 this time. My guess is as good as yours, based on the technical analysis, the fundamentals, the sentiment and the potential black swan events.
Some say that this bull run will take us up to around $300 000 per bitcoin by the end of 2021. So whether you buy in at $3 200 or $4 400 won’t make too much difference overall, and thus now is just as good a time to buy in. I’m waiting for one more dip into the $4-5 000 region. Anywhere around $4 500 is a fine for me. Bitcoin may be open to a $1 000 retracement in price, which is around 25-30%, and still be approaching the bull run. This is the repeat of the last early bull market stage in 2014/5. A pump up came from the local low, a pull back of around 30% came in the first failed attempt of bitcoin to soar in price. Then the real bull market kicked in and price just climbed, never really looking back.
So this is it folks, here comes the next bitcoin bull run, welcome aboard and get your life jackets on, next stop the moon. How will we know when we’ve arrived, you may ask? We might want to sell at the top so need to be informed as to where that top might be. Well, look at the weekly chart to know these details. The bigger time frame charts for bitcoin price will be clearer indicators, particularly the weekly RSI. Also the weekly MA or moving average prices will show us. When the death cross arrives, the opposite of our recent golden cross, we will know it was time to sell last month already. So watch the 50 weekly MA and when it curls over and moves down toward the 200 weekly MA, we can pre-empt the bear market downturn and sell near the top.