Now that is a bullish looking Bitcoin chart
Don’t hate, but I also short cryptos. Not often. Not as often as I short in Forex or in Futures, but I do short via Kraken. I also keep track of the short ratios from the various other exchanges that short. Full disclosure, I haven’t shorted Bitcoin over the last month. Anyway, the activity over the Memorial Day weekend was certainly a devious bear trap (well, we only know if it was a true bear trap well after the price action has moved on). And the volume that came in near the London session lunchtime and just before the New York session open was pretty telling. This is one heck of a bullish chart.
I’ve discussed Hurst’s style of analysis and cycles before. This is what we are looking at on this chart. One of the amazing tools in the MotiveWave software is the Hurst Cycle tool, which auto applies the time cycles, VTLs (Valid Trend Lines), Sine waves and FLDs (Future Lines of Demarcation). All that we need to be concerned with is the diagonal trend lines and the time cycles they represent:
- Green Diagonal Line: 22-week trendline.
- Teal/Aqua/Turquoise Diagonal Line: 80-day trendline.
- Navy Blue Diagonal Line: 40-day trendline.
- Purple Diagonal Line: 20-day trendline.
This current drive down that has lasted pretty much all month was met with resistance at the 22-week upper trendline and then it has found support at the 22-week lower trendline. Not only that, but we broke above the 80-day trendline as well. And right in front of us is the next two zones we need to bust through: the 20-day and 22-week trendlines. Now, we have some significant momentum for doing that. We have a whammy of a close forming on the daily chart:
- Bullish Engulfing Candlestick
- Tweezer Bottom
- Multi-timeframe trendline support.
- Stupid amount of bullish divergence.
- Hurst Pivot Low formed.
- ABC wave complete.
Take special note of the value areas ahead and how they correspond to these resistance areas. $8000 is a very obvious and important zone we need to cross above. After that, the 80-day upper trendline is sitting in that $9000 value area. We bust above that and there’s currently nothing painted on the daily charts to indicate and strong near-term resistance.