It’s pretty nice to see the major cryptocurrency – BTC, holding quite well despite a drop below the parabola on the 12-hour time frame. The first potential sign of weakness is the very mild divergence of the on-bound volume. The drop doesn’t call for a big correction yet as we need to brace up for some couple of swings and the dominant cryptocurrency eyeing consolidation. I see Bitcoin re-entering the parabola to avoid a potential downward correction. The bullish market is still strong even though, there has been a potential momentum loss.
Fig.1.Bitcoin: A drop below the parabola on the 12-hour time frame.
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It’s not a big surprise that BTC has held up quite well, considering the big move made in the last couple of weeks. Bitcoin will continue to churn nicely as the relative strength index (RSI) in the positive region suggesting a measurable advantage to the bulls.
However, the primary Altcoins indicator, Ethereum seems to have slowed down after ripping-up above $460 mark. So let’s be on the lookout as we still see a little bit of strength, making $420 our support line.
Bitcoin
For the daily chart, the uptrend is still strong and churning out nicely. Holding the EMA 8 all the way up and consolidating. That being said, there are some short term signs of caution without second evening star pattern in two week, as well as some mild OBV bear divergence as the RSI prepares to leave the power zone since entering it circa 12k.
Some pull backs and 3 red candles in a row may be indicating to potential momentum loss. Even though it’s still bullish but I have to be conservative here, we have not had 3 red candles since the $10500 mark. So for now let’s keep watching EMA 8.
Fig.2. Bitcoin: 3 red candles in a row resulting to potential momentum loss and divergence of the volume. Source:bitcoin.live
Looking at the weekly chart, we have 6 green candles in a row. The last time we had 6 green candles in a row was after the March big decline. It shows, how strong the bullish market has become. We’re in the power zone and we’re inching closer to the high break.
Fig.3. Bitcoin: Inching closer to hit the 20k mark. Source: bitcoin.live
Keep your eyes on the 20k mark, we need to hold on, there will be some moments of pull backs though but we will get there.
Ethereum
Still a little bit of strength and the first of the majors to threaten a major EMA 8 break here. So we should potentially take that as a warning sign as the price heads back to horizontal support around that $420 area. That being said, so far the sell-off is on light volume, so support should hold if it indeed is tested.
Fig.4 Ethereum: Likely to retest $420 area support. Source: bitcoin.live
Top Takeaways
$BTC EMA 8 support $16k area resistance
$ETH $420 area support $468 area resistance