Bitcoin bulls have been very successful today. For a brief moment the price of Bitcoin reached $6000 on Bitfinex. These levels are something we haven’t seen for almost 6 months now so it’s very refreshing to see Bitcoin make moves again especially after days of sideways trading.
Looks like my previous prediction held true as well when I said all is fine if Bitcoin manages to stay above $5000. It always feels good to be right!
Bulls take a break for now
One of my favorite time frames for day trading Bitcoin is the 10 day chart with 1 hour candles. I like to add Relative Strength Index to look out for overbought and oversold market conditions and finally I’ll check for MACD crossings to confirm the trades.
There is no point in getting overly complicated with your charts and end up with mixed signals.
When I look at my setup above I’m seeing the Bitcoin bulls exhausted, but not too much selling pressure. This means that, rather than selling, most of the buyers are simply holding on to their coins for the time being.
Which is a good indication especially because we broke the psychological barrier of $6k for a brief moment making everyone’s heads spin when they think about the imminent lambo.
With the Crypto Fear and Greed index leaning towards the Greedy area, I wouldn’t jump in just yet. The market is known for its sharp and fast changes and until the Relative Strength Index is at least around 40 again, I’m definitely not going all in.
Note: The RSI is overbought on various other time frames including the daily which is another one of my favorites.
Additionally MACD is clearly signaling us to close the BUY orders for the time being and the candles themselves show us indecision among traders.
What I’m currently looking out for is either $5600 or maybe even $5550. If we go there gradually then that would be a good entry point for another long position.
This post was written by ynef