After the crypto bloodbath that happened during the month of May, Bitcoin is seeing a decent comeback after plummeting back to the $7,000 level, forming a triple bottom. As of the time of writing, Bitcoin is trading at the $7,600 level and is looking to move forward on a strong uptrend in the coming days.
Key Fibonacci Levels
Looking at the graphs, Bitcoin appears to have bounced decently from the lower extension of the 0.786 Fibonacci level, climbing up to the next strong resistance level. Despite the bounce, Bitcoin is still trading on a downtrend with major resistance at the $7,800, which coincides with the 0.618 Fibonacci level. A successful break through the resistance level could have Bitcoin heading towards the upper resistance at the 0.5 Fibonacci level around the $8,200 mark. On the other hand, however, a rejection at the $7,800 level could have Bitcoin plummet again towards the $7,000, forming a quadruple bottom.
On the more positive note, the RSI level indicates that Bitcoin had a decent bounce from the oversold level at 30 RSI. As of press time, RSI level is at 44.5, which means that buyers are regaining momentum.
(According to Investopedia.com, “The relative strength index (RSI) is a momentum indicator developed by noted technical analyst Welles Wilder, that compares the magnitude of recent gains and losses over a specified time period to measure speed and change of price movements of a security. It is primarily used to attempt to identify overbought or oversold conditions in the trading of an asset.” With regards to the RSI levels, 30 RSI is the oversold and undervalued level, while the 70 RSI is the overbought and overvalued level.)
Bollinger Band Analysis
The RSI analysis is confirmed by the Bollinger Bands. Looking at the Bollinger Bands indicate that Bitcoin is rallying for a strong uptrend in the coming days. Bitcoin price had a good crossover above the middle Bollinger Band, which shows that Bitcoin is slowly getting some steam from buyers. In order to generate more uptrend, a confirmation through further increase in Bitcoin daily trading volume will be needed.
(According to Investopedia.com, “Bollinger Bands are a highly popular technical analysis technique. Many traders believe the closer the prices move to the upper band, the more overbought the market, and the closer the prices move to the lower band, the more oversold the market.”)
(DISCLAIMER: This is not financial advice. The analysis and recommendations provided here are based on my own research and personal opinion. Trade wisely!)