Bitcoin Analysis: Still Bullish but proceed with caution ⚠️
Bitcoin needs to hold $46,000 or it's done
With Bitcoin bouncing from the local bottom, we’ve experienced a few great weeks of positive price action.
Where does that leave us now? Are we bullish and hitting previous ATHs, or could this be a dead cat bounce, and is Bitcoin going lower.
My bias for Bitcoin is that we’re bullish but must proceed with caution.
For this analysis, I’m going to zoom out and stick to the daily timeframe.
Let’s start with the 21 Day Moving Average Exponential. We can see that Bitcoin crossed the 21 Day EMA on the 23rd of July, leading to a breakout to $50,000.
Bitcoin then topped out at $50,775 and has dropped to $48,200, leaving investors wondering what’s next?
Here are my humble thoughts.
Since Bitcoin’s breakout, it has tested the 21 Day EMA as support two times, each time bouncing off and continuing upwards.
$50,775 was heavy resistance for Bitcoin, and I wouldn’t be surprised if we tested the 21 Day EMA again, which would roughly make Bitcoin’s price around $46,000. If it holds like the last two times, we’ll break past $50,000 with no problem.
To further confirm my position, I'll add the Leviticus indicator to my analysis.
Leviticus is an indicator that I made. It's a combination of indicators that create a super badass indicator. It included the Wave trend, RSI, Stoch RSI, & a Custom Money Flow Index (MFI).
Look at the below Bitcoin chart, and you can see when the MFI crossed from red to green (marked with the green arrow), Bitcoin's price action turned bullish.
To show you how powerful this custom MFI is, check out Bitcoin’s crash from May. Just as the MFI flipped green to red, Bitcoin crashed roughly 40%.
Needless to say, Leviticus would have saved you a lot of money if you’re holding Bitcoin.
With Bitcoin being above the 21 Day EMA and MFI being in the green and slowly getting thicker, I believe Bitcoin is still bullish but remember, price takes the stairs, not the elevator.
Therefore, I expect Bitcoin to pull back to its 21 Day EMA, and if it holds while the MFI is still green, I believe we’ll break past $50,000.
If we break and the price closes below the 21 Day EMA, we will have to visit a Bearish scenario for Bitcoin.
I plan on taking this on a case-by-case basis, and I’ll be closely looking at how Bitcoin reacts to that 21 Day EMA.
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