Cryptocurrency Forecast; Golden Cross Confirmed, Outlook Bullish

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Cryptocurrency Forecast; Golden Cross Confirmed, Outlook Bullish

Golden Cross, It’s A Bullish Signal

I just saw an article about Bitcoin touting it’s Golden Cross. I went straight to the charts to see what was going on and had a hard time understanding what all the fuss was about. Bitcoin’s last moving average signal on the weekly chart was a Gold Cross, sure, but that happened 8 months ago. That signal did result in a vigorous rally but it’s played out. What’s Bitcoin doing for me now, other than trending steadily lower in spite of the bullish outlook?

Before I go on, let me explain exactly what this Golden Cross is, or was, how it is made up is what I mean. This Golden Cross in question occurred on the weekly chart early this spring, 2020. The shorter-term 50-period EMA moved below the longer-term 100-period moving average what as then called a Death Cross in the headlines. After a few weeks of sideways action the shorter-term EMA, in tandem with the market, moved above the longer-term EMA creating the Golden Cross.

So, Bitcoin moved up on the Golden Cross signal, hit a peak, and retraced more than 50% of the rally.

The world’s leading cryptocurrency is now bouncing off of the same, 100-period long-term moving average that provided the signal in the first place.

As a point of support it is usually a strong technical level, the 100-period moving average, so prices are likely to rise in the near-term. While not a Golden Cross, the bounce from the EMA is a potentially bullish signal we need to pay attention to.

A confirmed bounce from the long-term EMA would in fact confirm the shift in trend signaled by the original Golden Cross. In that light such a bounce could be strong and large. Traders need to be ready. When this thing starts moving we could see prices rally back to the 2020 highs in a matter of weeks.

The stochastic is working in Bitcoin’s favor. The oscillator is firing a strongly bullish crossover at this level and one I expect will result in higher prices for Bitcoin. The strong bullish crossover happens when stochastic diverges from the price action while the asset is testing support. When coupled with other technical buy signals like moving average crossovers, RSI or other signals big moves usually follow. The questions now are how will it go and how long will it stay there.?

If the $8000 level is not surpassed the downtrend in prices is likely to continue. If prices fall again, the long-term moving average is still the first target for support. A drop below that could take BTC/USD down to $6000 before it bounces again. If BTC/USD is able to move above the $8000 level its price may begin to gain momentum. If that happens the $9,000 and $10,000 levels are the most likely targets for the next resistance. Those could be hit in single trading sessions if the timing is right, $1000-day moves are common with Bitcoin.

Bitcoin Price Analysis: Golden Cross Confirmed

Bitcoin has formed a golden cross (50DMA above 200DMA) on the D1 chart, highlighting bullish market sentiment.

The digital cryptocurrency has responded positively to the golden cross formation by avoiding a sustained move under $9,600 for the third consecutive day and rising back above $10,000.

D1 chart

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Zooming in on the D1 chart shows the upward move has stalled around the 10DMA resistance of $10,078. As of writing, bitcoin its priced at $10,000 on Coinbase.

The outlook remains neutral with prices still trapped within the trading range of Sunday’s doji candle. From trading perspective, long exposure can be built if the cryptocurrency settles today above Sunday’s high of $10,048.

If prices fail to hold above the 5DMA at $9,982, the 1-hour chart support near $9,820 would be exposed. A violation there would invalidate the higher highs setup on the1-hour chart printed earlier today and bring back $9,600 on the radar.

Traders should note that a pullback from current levels would end up forming a head and shoulders pattern on the 4H chart.

4H chart

The neckline support would be around $9,400, under which selling interest could strengthen significantly, leading to a significant price drop.

Head and shoulders, however, is not a holy grail and often traps sellers on the wrong side of the market if the broader trend is bullish, which seems to be the case here, as suggested by the golden crossover.

Cryptocurrency Market Outlook; Lackluster Markets Move Higher

Bitcoin Is Moving Higher, Don’t Count On New Highs Yet

The Bitcoin/cryptocurrency market has cooled off, but that is a good thing. The market is up strongly YTD and a little consolidation is a healthy market mechanic, it sets the market up to continue moving higher later this year. Over the last few days the world’s leading cryptocurrency by market cap has been edging higher and taking most of the crypto market with it. The candles formed look pretty bullish and are supported by the indicators so higher prices are likely. The problem is that, without a catalyst, the move is likely to fizzle out before new highs can be set. Even if a new high is set, it will likely trigger another round of profit-taking/market rotation that will keep BTC/USD moving sideways for the next few weeks at least.

Longer-term, I still expect to see BTC continue its rally and possibly as soon as this fall. The signs are growing, Bitcoin is recapturing market share at a steady clip and the hash-rate keeps setting new highs. Coinmarketcap shows Bitcoin dominance approaching 72% and 2+ year high. Blockchain.com shows Bitcoin’s hash-rate has resumed its parabolic move higher as more and more miners get into the act. The bottom line is that Bitcoin is still the number #1 cryptocurrency and the market is flooding into it. It may take a little while longer to work though technical resistance at $13,000 but, once done, the move to new highs will be sharp and severe.

The #1 driver of BTC price over the next 8.5 months is going to be the halvening. As the number of miners and holders increases demand will increase and the halvening is going to cut new-supply in half. Just Litecoin did this year, BTC/USD should see a market-leading rally that adds several hundreds of percentage points to its value. LTC moved up nearly 500% from the low of 2020 to the high pre-halvening level. LTC has since pulled back where it is presenting another buying opportunity. Just like this year, next year when the BTC halvening rally hits full-stride it will help lift the entire crypto market, and Litecoin along with it.

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