Crypto Daily - Bitcoin ($BTC) price action is continuing to move in a range between $91,000 up to $100,000. With long term momentum indicators needing to reset, and the market requiring time to absorb the surge to the all-time high at $108,000, a holding pattern is the most likely short-term path for Bitcoin.
Bitcoin follows sideways range
Patience is going to be required in large measure when holding Bitcoin for these next few weeks. The most likely scenario is for the king of the cryptocurrencies to continue marking time while momentum indicators on the longer weekly and 2-weekly time frames come down and reset.Of course, the market is the market, and there can still be price spikes to the up or to the downside. However, this may be contained within the range that Bitcoin is currently traversing inside, stretching from around $91,000 at the bottom, to $100,000 at the top.
Source: TradingView
The range is pictured in the short-term 4-hour chart above. It can be seen that the bottom of the range has been well respected, while the range top was completely broken through by the price surge that took Bitcoin to the all-time high at $108,000.
It now remains to be seen whether the Bitcoin bears can drag the price down below the bottom of the range. This could happen, but it may be just as short-lived as the last breakout of the top of the range.
All in all, if the price can just continue to go sideways, more and more market structure can be laid down, eventually to be used as a base for the next stage of the bull market.
Simple moving average - a concern?
Source: TradingView
On the daily time frame, the simple moving averages are still showing that future price action is bright for Bitcoin. It can be seen how they twisted and intermingled when Bitcoin was following its 8-month long bull flag, and then when the price broke out, they all began to separate and get into order, with the blue 50 SMA above, the green 100 SMA in the middle, and the red 200 SMA at the bottom. During a bull run, this is how they would continue to present.
That said, it is always the blue 50 SMA that turns back down first when there is a major reversal. This is the first warning of such an event. Therefore it is good to keep an eye on how this line is shaping.
In the daily chart above it can be seen that the blue 50 SMA is in fact starting to lose its upward momentum, and that it is beginning to bend sideways. If this continues, and the line starts to come down, this could mean one of two things: that a major reversal is about to happen, which could result in the price coming down first, and then back up to form a double top; or it could be straight down from here, and an end to the bull market.
Both scenarios do point to the coming end to the bull market. It just depends whether a potential double top may prolong things.
Finally, it may be that the current bend in the 50 SMA is just a kink, and that it will straighten itself out as price starts to climb again. Keeping one’s eyes peeled on indicators such as the simple moving averages is a great way to understand the health of the bull market. Do bear in mind that the 50 EMA lags by around a month, so take this into account.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.