Bitcoin similarities with April 2018
The big question remains whether Bitcoin is continuing the bullish trend or whether we are past the top and moving further down. There are some similarities with April 2018, while I also see some differences. Let's got through them one by one.
Similarities:
1. We have seen a long bull run that ended with a substantial sell-off, a selling exhaustion spikethat tested 50-week MA, followed by optimism that led to a test of previous range highs as well as the 20-week MA;
2. Parabolic SAR continued to show a bearish bias even during the optimistic times;
3. MACD continued to show a bearish environment.
Differences:
1. RSI showed a continuous pattern of lower tops during the bear market stage. In the current situation, we see a higher top;
2. The 20-week MA ended up crossing the 50-week MA. This hasn't happened just yet, but the lines are moving in opposite directions;
3. We have not seen a blow-off top, nor have we seen a typical "return to normal" influx of buyers after the top that leads to a quick lower top, confirming the bearish trend. Both blow-off top and return-to-normal phases have been missing.
Based on the above, my conclusion is that we are still range trading without a clear decision, however I have reason to be optimistic. As a strong believer in RSI, the higher top in combination with the absence of a clear blow-off top leads me to believe that we are not done yet with the bull market. We could see a test to the mid-range around 36-37K and only if that would fail (based on daily close) would I get worried. It is however critical that we see a weekly close above 20-week MA AND above the key resistance line at 42K. Once this is achieved, we should start looking forward to a very good second half year for crypto.
Similarities:
1. We have seen a long bull run that ended with a substantial sell-off, a selling exhaustion spikethat tested 50-week MA, followed by optimism that led to a test of previous range highs as well as the 20-week MA;
2. Parabolic SAR continued to show a bearish bias even during the optimistic times;
3. MACD continued to show a bearish environment.
Differences:
1. RSI showed a continuous pattern of lower tops during the bear market stage. In the current situation, we see a higher top;
2. The 20-week MA ended up crossing the 50-week MA. This hasn't happened just yet, but the lines are moving in opposite directions;
3. We have not seen a blow-off top, nor have we seen a typical "return to normal" influx of buyers after the top that leads to a quick lower top, confirming the bearish trend. Both blow-off top and return-to-normal phases have been missing.
Based on the above, my conclusion is that we are still range trading without a clear decision, however I have reason to be optimistic. As a strong believer in RSI, the higher top in combination with the absence of a clear blow-off top leads me to believe that we are not done yet with the bull market. We could see a test to the mid-range around 36-37K and only if that would fail (based on daily close) would I get worried. It is however critical that we see a weekly close above 20-week MA AND above the key resistance line at 42K. Once this is achieved, we should start looking forward to a very good second half year for crypto.
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