Bitcoin Update May 3, 2020

I know I usually post a podcast episode (Better Than Bitcoin Podcast) on Sundays but my views in where Bitcoin is going next haven't changed much despite the drastic price increase from this past week.

So diving right into my views that hasn't changed: I have reason to believe that Bitcoin cannot continue this rally upwards.

Here are some trend-lines that have been proven useful. You can see Bitcoin was rejected at the 9500 zone on the middle trend-line. The reason that bitcoin went to test the middle trend-line was because it had a break and retest of the lower trend-line. This scenario has happened before when bitcoin broke above the lower trend-line for the first time in mid January 2020. You can see the same break and retest there too. You can also see in the uptrend caused by that trend-line break in mid January 2020, Bitcoin's rally lost steam once it reached the top of the middle trend-line and had it's RSI reach overbought levels.

As you can see now, Bitcoin's hourly RSI reached a high of 95.32. The last time Bitcoin's hourly RSI reached that high was a value of 95.67 on October 25th 40% pump (the reason I remember that date was because it was on my birthday).

Another indicator that is pointing out to me is a TD Sequential sell signal with a count of 9 that happened 3 days ago.

For context, TD Sequential is used to show exhaustion in a trend and indicate when a trend reversal is most probable. Bitcoin has had 7 consecutive weeks of green without a substantial pullback to warrant indication of a new bullish uptrend. This makes me believe that the possibility of revisiting the previous low of 3850s not completely off the table. If Bitcoin was to indicate a new longer term bullish uptrend, I expect a 38.2%, 50%, or 61.8% pullback from the local high of 9500 (which I have marked as a red box on some of these charts) with a bounce and trend to above the local highs of 9500, 10500, 13860, and lastly 20000. If Bitcoin makes good progress upwards after a reasonable pullback and starts to break a few (not just the 9500 level) of these local highs, then the sky is the limit with Bitcoin.

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