At the time of writing, Bitcoin is trading above $5,100, although volumes have been dropping across all exchanges over the weekend.
BTC is trading above its 200-day EMA after continuing its pump from last week. During the weekend, price has remained quite stable, trading between $5,100 and $5,200.
Let’s take a look at what’s going on with Bitcoin.
At its peak last week, price touched close to $5,600 before hitting a sell wall shortly after. Volume-wise, things are a bit gloomier. As we can see from the volume bars on the left of the graph, Bitcoin’s volume seems to be hinting that people are still betting on a lower price for Bitcoin. Although most analysts consider the BTC bull market to have started already, I for one think we’re still going to retest the $3,800 levels before kicking off the official Bitcoin 2020 and 2021 bull run.
Last week, I mentioned as long as the price continues to move above the 200-day EMA we can be confident the bulls are back and buyers are in charge. I also mentioned in case I was wrong, then two things could happen: either Bitcoin follows the path of Litecoin and other altcoins and starts to consolidate above the 200-day EMA (a really bullish scenario) or it drops below the 200-day EMA. In the latter scenario, I argue Bitcoin would first dance around $4,700 for a few days before dropping into the $4,200-$4,400 levels.
Despite that and, because the 50-day EMA crossed the 200-day EMA last week, we might see BTC making new highs. That usually means buyers want to take back control. Nevertheless, my medium-term bet is that Bitcoin will slowly drop closer to its $4,000 support level.
I consider Bitcoin to be in a bull run when the 20-day EMA is above the 50-day EMA and the latter is above the 200-day EMA. Only then will I truly believe buyers are totally in control and enough new cash has definitely poured into the market.
Author: Pedro Febrero