Potentially a simple consolidation is beginning to illustrate interesting behavior of the price. In turn, the close of the month results in the defense of an important level for Bitcoin. Historically the turn of July and August has often been the beginning of significant movements on the charts. Will it be similar this time as well?
Bitcoin on the monthly interval
Last Sunday was also the day when Bitcoin closed the monthly candle. This one turned out to be quite a success. Thus we can observe an increase of nearly 16.2%. In addition, BTC experienced a rebound from the 2017 peak, which is also a very positive sign.
It is also difficult to pass by the indicators. Thus we see a steadily deepening bearish MACD, whose momentum seems to be waning. If valuations are maintained at similar levels as today, this could result in a relapse at the end of August.
The bullish RSI divergence is also evident. In case it is worth being cautious, as the chart has been experiencing it for quite a long time. Further declines can only exacerbate it. As we know, this kind of divergence does not indicate the moment of the final relapse of the price. But only suggests that such a movement has the right to occur soon.
Increasingly favorable situation on the weekly interval
It is noteworthy that for the first time in seven weeks the weekly candle on the Bitcoin chart closed above the 200-week moving average. We immediately reported this fact on our Twitter feed. If you’re not following us yet – be sure to start!
Although volumes remain relatively low, the MACD is clearly moving towards a bullish crossover. Historically, this kind of event has often resulted in the start of a new rally. Therefore, it is worth watching what will happen this Sunday and whether this scenario manages to come to fruition.
On the RSI indicator, on the other hand, we have set two potential resistance levels. The first of them (dashed line) is already relatively close. We think that a correction may occur from one of them. In turn, a breakout of both of them may give a chance for a stronger rally.
A completely different picture of the daily interval
The daily chart, on the other hand, stands almost in opposition to those presented above. We can see on it that the earlier breakout of the upward ascending channel did not have the momentum to continue the movement. This resulted in the return of the price to the inside of the formation, and ultimately the formation of a second channel in its place, with a more aggressive slope. This formation is inherently bearish of course.
In turn, the MACD is also clearly moving towards a bearish intersection. However, this movement is flattening out, which may result in the avoidance of the event. In addition, a very clear bearish RSI divergence is still in play. It has been forming for almost two months. It has not yet reached the overbought area, but as we know, it has the right to result in further continuation of declines.
In summary, we can clearly see that the situation on the longer intervals clearly collides with the daily chart. Moreover, the price action on the latter, has the right to strongly influence the events observed especially on the weekly interval. Following this pattern, we think that the close of the current week, which is currently underway, is particularly significant for Bitcoin. Thus, a positive scenario has the right to drive BTC to the $28,600 level, while a negative one could push the king of cryptocurrencies even into the region of this year’s minima.