A bullish setup for the bitcoin hodlers out there
Look at bitcoin’s latest weekly candle. Yes, it’s incomplete, but what a turnaround from where we were on Monday. As of the time of writing, it’s a big bullish pin. Unless we see a major reversal today, that’s a strong signal we may see further upside ahead.
• Bitcoin has rebounded impressively this week, generating a potential bullish signal
• Candlestick and chart patterns have provided accurate signals recently
• It’s been heavily influenced by riskier asset classes which in turn have been influenced by sentiment on the USD economic outlook
What. A. Turnaround.
Look at bitcoin’s latest weekly candle. Yes, it’s incomplete, but what a turnaround from where we were on Monday. As of the time of writing, it’s a big bullish pin. Unless we see a major reversal today, that’s a strong signal that we may see further upside ahead.
I say this because when you look at the price action, so many patterns on the weekly timeframe have provided reliable signals this year: the evening star after the record highs in March. The morning star in early July. The bullish engulfing in May. The bearish engulfing candles in June and late July – they’ve been trustworthy even if they weren’t sustained for long. Who’s to say this will be any different?
More to come for bitcoin?
Sitting in a bullish flag pattern, the magnitude of the rebound makes me wonder whether we may see a retest of downtrend resistance soon? And if the price manages to take out $70000 – the high struck in late July – it will break the sequence of lower lows dating back to when the record high was set, pointing to a possible retest of the level should the breakout stick.
Granted, a lot of things that need to go right for that scenario to play out. And buying after the massive rebound is not without its dangers, so it would be nice to see the candle completed before considering whether to join in. It would have been ideal to have bought the dip at the start of the week, as I flagged in a trade idea at the time.
