BITCOIN Remember the underlying channel? What does it show now? for BITFINEX:BTCUSD by TradingShot

I am not going to go into too much detail here as it is an idea that I first published on March 31, revealing a channel that many failed to see. Take look below:

** Before we start, please support this idea with your likes and comments, it is the best way to keep it relevant and support me. **

What did that channel show? Well it made a case why the March 13 low was the Bottom of this channel, revealing the identical Channel Down formations within the pattern that both drove Bitcoin to its December 2018 and March 2020 Bottoms. I am not analyzing those further, you can click on the chart above and find all the details.

What I will do on this study though is point out where we are now and where the price may go in the future. After all the underlying channel proved to be very accurate during March-April and so far into May.

** Where are we now? **
BTC is now again above the underlying channel’s middle (dashed) line, printing the 2nd straight (so far) ranged candle on the 1W time frame, indicating that last week’s High may be a (temporary?) top. On top of that, the current consolidation is taking place exactly on the 1W MA50, which is where the mid-distance consolidation took place also on the March – June 2019 bullish leg of the underlying channel.

** The importance of the RSI and LMACD **
It is not a coincidence that this consolidation is taking place around the 55.00 RSI mark. As seen on the chart this is exactly where the April 2019 consolidation took place. This shows that the bullish legs may be symmetrical. The LMACD just formed a BulliSh Cross, which is traditionally a strong bullish signal.

** What’s next? **
All the above indicate that BTCUSD is not overbought by any means on the long term (1W) chart and can’t be making such claims before the RSI reaches the 75.00 – 80.00 zone. The LMACD is also neutral on the 0.0 mark. What does that mean for the future? It means that long term investors have nicely caught the bottom and can wait for a new (overbought) 1W High before taking profit. The short term traders though may be good off taking profit during this consolidation as my recent short-term studies have shown. It remains to be seen if the 1W MA200 (orange line) can provide Support on a potential contact. After all we just had the Halving (3rd historically) event, that has the potential to fundamentally distort technical projections.

Do you agree with the reliability of this underlying channel? Are you expecting the Higher High trend-line to be touched again next or have an alternative target? Feel free to share your work and let me know in the comments section!

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Source: tradingview.com

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