Inferno analysis: Friday

Taking our regular bi-weekly look at the charts and markets, bitcoin has provided some surprises over the last few days. Tuesday saw bearish sentiment out in force, with a sharp dip below $6k. BTC dropped as low as $5,880 (Bitstamp) and it seemed that far lower was on the cards. But the rule held: when it’s looking most bearish, it’s bullish. All of those calling for lower prices had already done their selling, and there was little supply left. Since then bitcoin has recovered $600 to trade at $6,480 (at the time of writing).

Right now we’re trading sideways within a range or, if you are feeling charitable, in a very gentle upward channel. Looking at some of the classic indicators, that sideways picture is borne out. On the 4h, RSI is nudging upwards, currently around 60 — not overbought but with a slight bias towards higher prices right now. Zooming out to the daily, RSI is around 40 — not low enough to indicate it’s too oversold — and heading upwards. Daily RSI has provided good sell signals at 70 in recent weeks, and reasonable buy signals at 30. We would like to see momentum carried above 50.

At $6,480 bitcoin is still well under the 50 and 200 MAs, which now sit at $6,900 and $8,000 respectively. After the bearish Death Cross that occurred at the end of March, they are narrowing. However, the fact that bitcoin now stands at a similar price to its point at the last cross should caution against reading too much into it: bitcoin moves fast and a lagging indicator is no good on that timeframe. Nonetheless, conventional traders will doubtless make much of a Golden Cross, as and when it must occur.

Otherwise, we have seen confirmation again of demand around the $6,000 level, despite the brief intra-day dip below. Bitcoin has tested this level no fewer than four times now. Clearly accumulation is happening around $6,000, and the smart money will be looking to get in there if it hasn’t already. It’s a little early to say but volumes seem to be picking up slightly too — even though it’s the holidays. Overall, it’s time for cautious optimism again in what we think is a nascent and fragile recovery, but the beginnings of a new trend all the same.

---

Red hot news, scorching wit and searing opinion pieces from Crypto Inferno.

Join us on
Telegram: https://t.me/crypto_inferno
Reddit: https://www.reddit.com/r/CryptoInferno/
Twitter: https://twitter.com/CryptoInferno_
Facebook: https://www.facebook.com/CryptoInfern!