Today, bitcoin reached a new all time high as it rose by $500 in just a few short hours. At the time of this article, bitcoin is sitting in the $5300s as it looks ready, once again, to spring for a new all time high:
Figure 1: BTC-USD, 4-Hour Candles, GDAX, Macro Trend
On a macro level, BTC is showing signs of upward strength as the RSI and MACD are showing bullish strength. There are no clear signs of bearish divergence yet and the market is starting to pick up in volume as the price climbs, thus indicating that a healthy bullish continuation is likely. Looking at the 50 and 200 EMAs, we can see the slope is pointing upward and the market is trending well above both EMAs, showing us that the market is pushing upward in a sustainable manner.
On a micro level, there are slight signs of bullish exhaustion that may indicate the need to either consolidate sideways or pull back slightly before continuing upward:
Figure 2: BTC-USD, 30-Minute Candles, GDAX, Micro Trend
The MACD and RSI are showing clear signs of bearish divergence on the smaller timescales (shown via the red arrows on the indicators). Also, the current growth is decreasing in volume which usually indicates a lack of buyer interest at the current price levels as the trend continues upward. It’s important to note that the trend can remain healthy on a macro scale, while simultaneously remaining divergent on a smaller timescale. The divergence doesn’t imply a macro reversal — it simply means the current trend is lacking momentum to continue upward in the immediate future and likely needs to cool off before continuing any further.
On the higher timescales, bitcoin appears to be adhering to the ascending channel shown below:
Figure 3: BTC-USD, 1 Day Candles, GDAX, Ascending Channel
Since the beginning of the year, bitcoin has adhered to very nicely to this channel where it routinely tests the top, then tests the bottom, then tests the top, and so on and so forth. If we continue this pattern we can expect to see bitcoin test the $6000s before we see any major correction. However, it is important to note that, compared to Bitcoin’s last bull run to the $5000s, the volume is considerably lower. This may affect bitcoin’s ability to push toward the upper bounds of the channel. On the other hand, the indicators discussed in Figure 1 are showing healthy bullish signals, so we will have to see how the market responds to tests of new highs.
Bitcoin found new all time highs in the $5300s after having a sudden $500 rally.
The macro momentum indicators are showing signs of bullish continuation which may push further new all time highs.
The smaller time frames are showing signs of bullish exhaustion so we may see some consolidation before any bullish continuation is seen.
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