Strong moves were higher during the New York session. Near term, resistance could trigger a lower move.

Strong intra-day moves during Monday New York Session

Bitcoin – and the broader cryptocurrency market as a whole – has experienced a significant amount of bullish movement during Monday’s trading. Traders had concerns about some new two weeks lows that might be found, especially around 2000 EST yesterday (Oct 6th, 2019). However, since then, prices have continued to rise and experience some bullish price action. Since touching the low of 7762.35, Bitcoin has rallied up toward the 8200 value area and is currently trading at 8188. The 4-hour chart (top right) has Bitcoin facing pressure against the bottom of the Kumo with the top of the Kumo (Senkou Span B) is just above that. Senkou Span A and B equate to some powerful resistance very shortly. On that same chart, there are some very interesting levels. The thinnest part of the Kumo is just two days away. The Kumo represent very weak support and resistance levels. Depending on how Bitcoin trades over the next couple of days, we could see Bitcoin launch higher above the 4-hour Kumo.

The daily chart for Bitcoin (top left) shows an extremely bullish condition for Bitcoin. Bitcoin has currently formed a bullish engulfing candle on the daily chart, with the current close above yesterday’s open. More important is the fact that Bitcoin has closed above the Tenkan-Sen for the first time since the major sell-off on September 24th and the first time since the last close above this line back on September 19th. The next major level of resistance for Bitcoin is the daily Kijun-Sen at 9080. Beyond that, the Kumo is the next major resistance zone, and it should prove to be the most difficult area to crack. The daily Kumo is thick and is trending lower with absolutely no bullish reversal signals on the daily chart. Price could remain below this level for a while. Price is below the Kumo, the Chikou Span is below the Kumo, and both the Tenkan-Sen and Kijun-Sen are below the cloud with the Tenkan-Sen lower than the Kijun-Sen.

Only the hourly chart (bottom) shows hints of any strong bullish change in direction. It has nearly all conditions met for a bullish outlook higher. Price and the Chikou Span are trading above the cloud, which is one of the ideal bullish entry strategies. Bitcoin is also above the current Tenkan-Sen and Kijun-Sen, with the former greater than the later. Perhaps one of the most important technical conditions on the chart is the future Kumo. Senkou Span A recently crossed above Senkou Span B turning the future Kumo green. Besides the technical analysis, we should also consider the strong correlation of the US equity market and Bitcoin. I am a firm believer in Charlie Lee’s analysis that says we probably won’t see new all-time highs in Bitcoin until the stock market reaches new all-time highs. While that correlation may not make sense to cryptocurrency enthusiasts who view Bitcoin as a source of security and a risk-off asset – the simple fact of the matter is that Bitcoin remains a mostly speculative and risk-on asset. I am bullish on the stock market and expect to see it break new all-time highs in October. I expect Bitcoin to trade near the 12k value are in October.