Bitcoin rallied on Wednesday, breaking a bearish two-day streak and rallying up to $58K before closing the daily candle around $57K. This is a bullish reaction and very much needed as BTC needed to find support at the 50 Day EMA else face jeopardizing the short-term uptrend.
(May 5, 2021 8:30PM EST)
Bitcoin recovered nicely on Wednesday, bouncing off the 50 Day EMA and putting in a higher high relative to yesterday's bearish candle. This is exactly the sort of candle we needed to maintain this short-term technical uptrend; now we need continuation. Another bullish candle and higher high would be ideal, as it looks like Bitcoin may be looking to make another move up to $60K in the near-term.
May has proven to be a very bullish month for ETH as well as some other altcoins of note, which is great for the larger crypto space, however these altcoin rotations are typically short-lived and usually precede a retracement while capital rotates back into BTC, lifting its price back up. This is our primary view going forward.
However, if BTC were to fall below the 50 Day EMA again, then this would, of course, be bearish and break the short-term uptrend, sending us back down to the low $50,000s to retest support, and possibly slip lower. While I think the downside is limited given the myriad of bullish fundamentals and the overarching technical uptrend, the possibility remains and we can't rule it out entirely.
RSI has recovered a bit and risen to about 53 on the daily chart, putting in a slightly higher high as we look to be in a re-accumulation zone following the mid-April selloff.