Hey friends, hope you are well and welcome to the new update on Bitcoin (BTC).
The consistent bounce from weekly 50 SMA:
Whenever the price line of bitcoin moves at the 50 simple moving average first time, after breaking out this 50 SMA, it always takes bounce.
The same value of relative strength index:
When 1st time the price action reached the 50 simple moving average and the stochastic entered the oversold zone, the value of RSI was approximately at 40.
If we place a trend line on this level of RSI. It can be observed that whenever the priceline reaches the weekly 50 simple moving average to have a bounce the value of the relative strength index is almost the same. In the below figure the trend line is showing this move of RSI with clarity.
The 50 SMA moves up to support the price action:
Here I want to draw your attention to the very important point which and so many intellectual traders are following this as well. It never happens in the history of bitcoin in the weekly time frame chart, that the price action at the first attempt broke down the 50 SMA, we always had a 50 to 60% correction rally. And this is the time when several traders accumulate more and more Bitcoins. And every time the 50 SMA moves up and provides support to the price action. So it is possible that the priceline of BTC will move here sideways between $30K to $40K and the 50 simple moving average will be moved up and provide support to the Bitcoin and then we will have a rally to the upside. So we should keep an eye on this move and whenever the 50 SMA hits the price action then we should be ready for the big move. Here I want to draw your attention to the very important point which and so many intellectual traders are following this as well. It never happens in the history of bitcoin in the weekly time frame chart, that the price action at the first attempt broke down the 50 SMA, we always had a 50 to 60% correction rally. And this is the time when several traders accumulate more and more Bitcoins. And every time the 50 SMA moves up and provides support to the price action. So it is possible that the priceline of BTC will move here sideways between $30K to $40K and the 50 simple moving average will be moved up and provide support to the Bitcoin and then we will have a rally to the upside. So we should keep an eye on this move and whenever the 50 SMA hits the price action then we should be ready for the big move.
Bitcoin never broke down these supports:
In the bull run of 2017, we found the resistance at $20,000. There was a big market shake-off, then the price line found a support at $30K and started the next rally but never broke down this $3K support. After ending the bull run, it moved to that support but then took bounce from this support and started the next rally to the upside.
Now if we move back to the bull run of 2013, here the price action found the support of $60 when we had the market shake off. The price action started the next rally after the shake-off and never even came back to this $60 support level. Therefore we can expect that the price action of bitcoin will not break down the $30,000 support level. Because after finding the support, the price line also started the next rally to the upside. We can observe that whenever the price line comes to this level or close to this level it moves back to the upside after getting rejected.
Conclusion:
There is a highly volatile situation on the daily time frame chart and the fear factor it also at its extreme. But after watching the long-term charts we can have an idea that Bitcoin is entering an extreme bullish zone.
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