BITCOIN Failed to close 3rd green week but positive signs remainLast week, Bitcoin (BTCUSD) marginally failed to close its 3rd straight bullish 1W (weekly) candle, a feat that hasn't been achieved since the November 08 2021 weekly candle. This isn't ideal as BTC's last big rally (late July - late November 2021) started off with three straight (strong as well) green weeks. Despite this however, there is a growing number of positive indicators showing that this could be a sustainable accumulation period, preceding the start of a rally and the new Bull Cycle.
** The positives **
First and foremost, the price succeeded at closing above the 1W MA200 (orange trend-line) for the 2nd straight week. As you see on the chart below, this is essential during Cycle bottom formations and every time the price held above this level in past Cycles, it lead to a rally eventually:
Secondly, the 1W MACD just formed a Bullish Cross, the first since late March 2022. Now of course that last pattern led to a new sell-off and Lower Low eventually but was much closer to both the 1D MA200 (yellow trend-line) and the 1W MA50 (blue trend-line), where the price got rejected. Now those levels are around 33223 and 40625 respectively, so there is much more room to grow before we can discuss about a rejection/ pull-back.
Among all the above, we shouldn't forget to acknowledge the fact that Bitcoin has kept the 1W MA300 (red trend-line), which is the basic Support of the Cycle. As you see, on the snapshot above, that was the level that supported the market during the March 2020 COVID (black-swan) event. If it held that huge psychological test, there is on reason not to believe that it won't hold this time as well.
** Some hurdles **
We see the biggest Resistance levels, on the short-term at least, on the Fibonacci patterns drawn. The Fib Channel that is illustrated has kept the price closing below its 0.5 Fibonacci retracement level on 3 straight weekly candles. Similarly, on the horizontal axis, the price has failed to close (broke it on the July 25 candle but failed to close above it) above the 0.236 Fib retracement level (orange) also for 3 straight weeks. It is apparent that this Fib cluster forms a strong Resistance, at least on the short-term. Breaking above it, opens the way for the 0.382 Fib, potentially testing as well the 1D MA200.
Rejection on the 0.236 Fib can result in short-term selling back to the June Support, on a similar Double Bottom scenario as in July 2021 and February 2022. Do you think this would still be enough to support the market and start the new rally in September/ October? Feel free to share your work and let me know in the comments section below!
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