Over the past few hours, Bitcoin (BTC) has started to mount a strong comeback. After falling as low as $7,690 just earlier today, the leading cryptocurrency has surged as high as $8,100, marking a 5% gain after an 8% retracement.
Firstly, $7,700 was a key level to hold, meaning that Bitcoin bouncing off it after a retracement is an extremely positive sign. It closing on a daily basis above that level and then continuing to bounce off that level suggests bulls are still trying to assert control.
From a more macro point of view, analysts are also bullish on Bitcoin. Byzantine General recently pointed towards Bitcoin’s one-week chart in conjunction with its Relative Strength Index reading. He showed that per historical analysis, applying previous market trends to the current, “the bottom is in,” noting that the RSI has made a perfect re-test of a key support.
Financial Survivalism, a trader who called Bitcoin’s spike to the $8,000s last week, has added to this sentiment, writing in a TradingView post that he expects for BTC to test $20,000 by July 1st of this year. He looked to the following technical indicators:
The Lucid Stop and Reversal has printed a bullish candle for the first time since July 2019, when BTC was trading well above $10,000.
The Average Directional Index on a daily basis has seen the first bullish crossover since March 2019.
The one-week Relative Strength Index for Bitcoin is “getting ready to test 50,” a level that if broken through may imply dramatic upside.
The one-day Ichimoku Cloud has formed a bullish TK cross.
Bitcoin Still Under Key Resistance
Sure, the daily outlook for Bitcoin is starting to look positive again, though there remain a few overhead bearish factors that could negatively afflict this market in the coming days.
Scott “The Wolf of All Streets” Melker, a prominent cryptocurrency trader and commentator, recently drew attention to the charts of large-cap cryptocurrencies against the U.S. dollar. He showed that many large-cap coins — including Bitcoin, Ethereum, and Litecoin — are hitting “key resistance on their USD pairs,” adding that this isn’t “particularly encouraging.”
These resistances are pertinent for they are what have constrained Bitcoin’s upward price action over the past six months or so.
Large Cap USD Pairs
Many large-cap coins are hitting key resistance on their USD pairs. $BTC, $ETH, and $LTC are all shown here. Considering they are generally underperforming on $BTC pairs, it would take a major Bitcoin move up to break out here. Not particularly encouraging. pic.twitter.com/Ogh0eMj4pU
Also, trader HornHairs has noted that the cryptocurrency will need to close above $7,870 on Sunday (the weekly candle close), or else he will expect a dramatic ~25% move down to $6,000, for that close would confirm that BTC was trading in a clear macro bull trap.