Bitcoin is fast approaching a crescendo moment that might set the tone for the coming weeks against a backdrop that could push the coin to all-time highs this year.
A story of consolidation
As bitcoin approaches the end of the second quarter, the coming monthly close could dictate the tone of the next few weeks ahead. More specifically, should bitcoin surpass its prior high and close a full-bodied candle above $10,700, this would be an indication that buying pressure is outweighing sell-side action.
Should bitcoin fail to rally past this level, the outlook still isn’t grim, but simply extends the time-line for new all-time-highs with a deeper correction period. As such, these next few days will provide a somewhat crucial indication as to what could be expected and when.
From a technical perspective, bitcoin is trading within a bullish ascending triangle formation (discounting the 2nd June Coinbase pump and dump price-action).
Homing in on June’s price action, it’s clear that this month has been characterised by a series of consolidation moves through and through. In fact, bitcoin has printed consecutive lower highs and lower lows on the daily time-frame, indicating a build-up before a possible attempt to continue the trend, or for a trend reversal to ensue.
As per previous mailouts, the levels to keep an eye on are $8,600, $9,300 and $10,000, respectively. Should bitcoin fall below $8,600, which coincides with the 200- daily exponential moving average (EMA), then a deeper correction towards the $7,500 breakout area can be expected.
On the flipside, now that bitcoin has successfully bounced from the 50-daily EMA, a retest of $9,800 to $10,000 is in the cards. Ultimately though, bulls will have to push through the local high of $10,500 in order to convincingly declare a trend continuation. A daily close above this level will open the door to $11,000 and beyond.
Taking a look at price-action during this entire structure, it’s also evident that $9,300 has acted as a clear pivot point, flipping into support and resistance depending on trends on lower time frames. The Volume profile at this level is also relatively high, indicating high trading activity when price meets this level.
Shifting to our technical indicators, the Money Flow Index (MFI) – which is effectively a volume-weighted RSI – has flashed two consecutive buy-signals on the daily time-frame. Notably, this indicator is at odds with the Relative Strength Index, which has now flipped marginally bullish, but could still be considered in neutral territory at the time of writing. Often enough, these indicators can compliment each other when seen in confluence.
Bitcoin fundamentals have never been stronger
Meanwhile, recent data from Glassnode media – arguably the industry gold standard for on-chain crypto data – shows that bitcoiners have become highly unwilling to part with their bitcoin. Indeed, bitcoin balances on exchanges is now as low as it was since May…