Bitcoin Bull Run to $100K+ Once We Break 200 Day Moving Average!
Hi guys, this is OG back with another Bitcoin update. If you find value in my work, please do like, share, and comment. And also feel free to share your ideas and technical analysis in the comments below.
In this post, I will go through a multi-timeframe analysis of Bitcoin, from the daily timeframe to the 4H TF down to 1H TF and even the 15Min Timeframe in order to provide a comprehensive technical analysis of Bitcoin.
Let's start on the daily timeframe. In this chart we see that Bitcoin was starting to run of momentum around 60K. While there was a series of higher highs at 58K, 62K, and 65K, these higher highs were only incrementally higher. After topping out at 65K, price formed a head and shoulders pattern, from which price broke down and crashed to the low of 30K. During this crash, price fell below the 200 Day Moving Average, and as a result many are saying that the bull market is over, since the 200 Day Moving Average is used by many to determine whether an asset is in a bull or bear market (i.e., if price is above the 200 Day Moving Average, then we are in a bull market and if price is below the 200 Day Moving Average then we are in a bear market). After the crash down to 30K, price started to consolidate right under the 200 Day Moving Average, getting ready to break out. The question is which way it will break out. From a purely technical perspective, since the first leg of the move is down, there is a higher probability that price will break to the downside to continue to the trend. That said, price didn't get any separation from the 200 Day Moving Average (ie. there is no visual gap between price and the 200Day Moving Average), suggesting an exhaustion of bearish momentum. There are many instances in Bitcoin's history where price consolidates right below the 200 period moving average just to break back above, trapping many shorts. I'm personally leaning towards this scenario, where Bitcoin is trapping many shorts below the 200MAs before pumping back above and continuing the bull run. If so, the area between 30K and 42K would be the biggest bear trap of this bull market. Currently, the 200 Day Moving Average is at 42.5K, so I will be paying close attention to if Bitcoin can break and close above that level.
Moving down to the 4H timeframe, we see that there was as series of lower highs at 42.5K, 40.8K, 39.5K, and 38.5K, forming a resistance trendline that kept prices down. Bitcoin eventually broke out of this resistance trendline at 37.5K and rallied all the way to 41K, thus taking out 3 out of the 4 swing highs, leaving 42.5K as the only unconquered swing high as overhead resistance. Coincidentally, this lines up perfectly with the 200 Day Moving Average, showing just how important the 42.5K level is for bulls to overcome. As a result, it likely wont be an area that is easy to overcome, but once it breaks, there is a high likelihood that there will be a strong rally as sentiment flips from bearish to bullish, leading to shorts covering their longs and those who have been waiting on the sidelines in cash or stablecoins to once again come back into the market. Price action on the 4H timeframe is quite bullish at the moment, as price managed to break and close above the 200 period moving average and have started to consolidate, seemingly getting ready for another leg up. If enough energy is built into this consolidation, there is also a chance that price violently breaks above 42.5K without much resistance, similar to how price broke above 6K when everyone thought 6K would be Bitcoin's biggest level of resistance (for those of you who remember when Bitcoin bottomed at 3.2K and rallied to 14K before the Covid crash).
Moving down further still to the 1H timeframe, price seems to be in a bull flag/symmetrical triangle. And since the move into the triangle was a bullish move, there is a higher likelihood that price will break out to the upside from the triangle (of course, it could also break down, which is why we need to track it). Even though this is a tight triangle, a break above would give us a target near 42.5K. This is why in this post I wanted to cover all of the timeframes, because right now they are all interlinked and a reversal on the higher timeframe will start on the lower timeframe. Keeping an eye on the lower timeframe will therefore give early warning as to what is likely to happen on the higher timeframes.
Now drilling down to the 15Min timeframe, we still see the symmetrical triangle from the 1H timeframe, this time with more detail. We also see that the 200 period moving average on the 15Min timeframe is at 39.5K. Since breaking above the 200 period moving average on the 15Min timeframe, price has not retested it, so I wouldn't be surprised for price to retest it before moving up. In fact, this is where I'm waiting for a potential long entry. If price comes down to test the 200MAs and gives a bullish signal (eg. candlestick, trading pattern, volume, MACD, etc), I will be looking to put in a long trade. The first test of the 200MAs after an extended move typically has a high probability of price continuation, even if it is only good for a scalp trade.
In this post, I will go through a multi-timeframe analysis of Bitcoin, from the daily timeframe to the 4H TF down to 1H TF and even the 15Min Timeframe in order to provide a comprehensive technical analysis of Bitcoin.
Let's start on the daily timeframe. In this chart we see that Bitcoin was starting to run of momentum around 60K. While there was a series of higher highs at 58K, 62K, and 65K, these higher highs were only incrementally higher. After topping out at 65K, price formed a head and shoulders pattern, from which price broke down and crashed to the low of 30K. During this crash, price fell below the 200 Day Moving Average, and as a result many are saying that the bull market is over, since the 200 Day Moving Average is used by many to determine whether an asset is in a bull or bear market (i.e., if price is above the 200 Day Moving Average, then we are in a bull market and if price is below the 200 Day Moving Average then we are in a bear market). After the crash down to 30K, price started to consolidate right under the 200 Day Moving Average, getting ready to break out. The question is which way it will break out. From a purely technical perspective, since the first leg of the move is down, there is a higher probability that price will break to the downside to continue to the trend. That said, price didn't get any separation from the 200 Day Moving Average (ie. there is no visual gap between price and the 200Day Moving Average), suggesting an exhaustion of bearish momentum. There are many instances in Bitcoin's history where price consolidates right below the 200 period moving average just to break back above, trapping many shorts. I'm personally leaning towards this scenario, where Bitcoin is trapping many shorts below the 200MAs before pumping back above and continuing the bull run. If so, the area between 30K and 42K would be the biggest bear trap of this bull market. Currently, the 200 Day Moving Average is at 42.5K, so I will be paying close attention to if Bitcoin can break and close above that level.
Moving down to the 4H timeframe, we see that there was as series of lower highs at 42.5K, 40.8K, 39.5K, and 38.5K, forming a resistance trendline that kept prices down. Bitcoin eventually broke out of this resistance trendline at 37.5K and rallied all the way to 41K, thus taking out 3 out of the 4 swing highs, leaving 42.5K as the only unconquered swing high as overhead resistance. Coincidentally, this lines up perfectly with the 200 Day Moving Average, showing just how important the 42.5K level is for bulls to overcome. As a result, it likely wont be an area that is easy to overcome, but once it breaks, there is a high likelihood that there will be a strong rally as sentiment flips from bearish to bullish, leading to shorts covering their longs and those who have been waiting on the sidelines in cash or stablecoins to once again come back into the market. Price action on the 4H timeframe is quite bullish at the moment, as price managed to break and close above the 200 period moving average and have started to consolidate, seemingly getting ready for another leg up. If enough energy is built into this consolidation, there is also a chance that price violently breaks above 42.5K without much resistance, similar to how price broke above 6K when everyone thought 6K would be Bitcoin's biggest level of resistance (for those of you who remember when Bitcoin bottomed at 3.2K and rallied to 14K before the Covid crash).
Moving down further still to the 1H timeframe, price seems to be in a bull flag/symmetrical triangle. And since the move into the triangle was a bullish move, there is a higher likelihood that price will break out to the upside from the triangle (of course, it could also break down, which is why we need to track it). Even though this is a tight triangle, a break above would give us a target near 42.5K. This is why in this post I wanted to cover all of the timeframes, because right now they are all interlinked and a reversal on the higher timeframe will start on the lower timeframe. Keeping an eye on the lower timeframe will therefore give early warning as to what is likely to happen on the higher timeframes.
Now drilling down to the 15Min timeframe, we still see the symmetrical triangle from the 1H timeframe, this time with more detail. We also see that the 200 period moving average on the 15Min timeframe is at 39.5K. Since breaking above the 200 period moving average on the 15Min timeframe, price has not retested it, so I wouldn't be surprised for price to retest it before moving up. In fact, this is where I'm waiting for a potential long entry. If price comes down to test the 200MAs and gives a bullish signal (eg. candlestick, trading pattern, volume, MACD, etc), I will be looking to put in a long trade. The first test of the 200MAs after an extended move typically has a high probability of price continuation, even if it is only good for a scalp trade.
