In this post I am going to show you a weekly chart of Bitcoin (BTC) on Coinbase and a daily chart. It is showing more strength than I expected and it makes me change my bias for now towards bullish.
Here is the weekly chart :
I have put the indicators CCI (Commodity Channel Index), RSI (Relative Strength Index) and OBV (On Balance Volume). All of them are actually looking quite good ! OBV has always remained strong for Bitcoin, even during the recent drop. This is a sign of accumulation to me rather than distribution.
The red arrows are showing an interesting picture. In the price chart you see that prices are higher between the two price points of the 13th of July 2020 and the 7th of September 2020. On the CCI and the RSI however the lines are lower. This means there is a hidden bullish divergence. On the RSI the difference is pretty low, but it is there.
Two other reasons I am getting more optimistic, is that Bitcoin held the yellow line, which seems once again very important in our general uptrend since the low of 3200$ back in 2018. It seems more and more to me that the Coronadump was an anomaly on the chart (very good shake-out though).
Furthermore last weeks candle close seems to be a stop in the drop of BTC. So far this is week it is getting confirmed, but the week is not over yet.
Another reason I am leaning bullish is that on-chain metrics have turned bullish around the 6th of September, according to Willy Woo (On twitter he is @woonomic). He is a very intelligent person and does a lot of on-chain analysis of Bitcoin. The last several times he came out saying that the on-chain metrics for BTC turned bullish, it turned out to be true, so I hold some weight to on-chain analysis. When these metrics turn bullish it usually takes several weeks before it reflects in the price (according to Willy Woo). This would imply that in a couple of weeks we should see Bitcoin rise in price. It does in no way mean we can no longer dump and fill the gap around the 9600$ level for example, but it seems more and more unlikely we will see a huge dump.
I recommend everyone to watch the tweets that Willy Woo sends out every now and then.
Here is a quick daily chart of Bitcoin :
Absolutely great to see that the Bitmex funding rate is still in favor of going long ! There are more people going short than going long and this could well lead to a short squeeze, which means prices shooting up and liquidating the shorts in the process.
The OBV is looking very good as well on the daily, so nothing to say really.
Last mention is the crypto fear and greed index. It is at 43 at the time of writing, which is a very small fear. Preferably I would like to see this go further down, but that would probably imply a drop in prices for Bitcoin under 10K, which for now are less likely to happen.
Looking at the weekly chart and the daily chart I am leaning towards being bullish for upwards movement in the next weeks. This does not imply we can no longer go down, but a lot of indications are bullish (OBV, CCI and RSI hidden bullish divergence on the weekly chart, On-chain metrics turned bullish, Bitmex funding rate favoring going long, etc.) and this is a good sign.
With prices being around 10.8K right now we still see a slight fear in the fear and greed index and this is good as well. The level to beat for BTC is the 12K area. This has been one of the most important levels in terms of resistance and support. If Bitcoin can close above 12K for two consecutive weeks on a weekly chart, I really believe we can move towards 17K and higher !
If you are investing, keep on hodling and do not get shaken out ! Don’t fall for the fear, uncertainty and doubt that gets created every now and then. On-chain metrics are looking good, the higher time-frame charts are looking good, so do not fall for short-term drops and FUD.
As always this is not financial advice and I am not a financial advisor. Please do your own research and make your own decisions.