Last week saw an end to the painful six-week-long range. This week we will take a look at the BTC breakout and try to get an idea of whether continuation of the current trend is likely, or if there is still a case to be made for bears.
The weekly closed well above the 6-week-long range and previous weekly resistance zones at 7600 and 7800. If there is some pullback early this week, bulls would likely want to see this area act as a support in a best-case scenario, or have the current weekly close above this at worst. Any move under the previous weekly range high that is not bought up quickly would be quite worrisome for bulls. If we see continuation to the upside this week, there will likely be initial resistance around the local 8500 top, and the next weekly level at 9500. If price moves to 8500 and sees strong resistance, or fakes out above this only to be sold off strongly, it would likely lead to a move towards the top of the old range around 7800-7900.
After the initial breakout from the range, daily saw resistance around $8500. Price pulled back and found support at the top of the daily range which is a good sign for bulls. Daily EMAs (20, 35, 50) are starting to show upwards momentum. These are good indicators of a macro trend change. However, a bit early to call as these can lead to false signals early on. For reference, price typically trends above in bull markets and below in bear markets. Bulls would want to see price trending above the EMAs. Any strong move through that, or especially closes below, would be a fairly good indicator that this was simply a false signal. Current daily resistance is around 8200, and then the local top around 8500. Daily support is at 7800-900.
In regard to volume, looking at spot markets leads us to perceive mixed signals. On the one hand, major tether-based exchanges showed very high volumes on last week’s breakout candle, very comparable to the breakout in April of last year. CME futures also had their first major volume week since the beginning of the Spring rally. On the other hand, ‘real’ fiat-based exchanges, while not demonstrating low trading volume certainly did not have the same kind of explosive buying as was seen in the Spring.
-Kevin
