Bitcoin TA: The road to $7200 and the next major bull run

Bitcoin 2 Hour Momentum Technical Analysis July 8, 2018

This is an update to my BTC analysis posted last week, summarizing the historical descending triangle and the significance of the support zone at $5875. I mentioned how Bitcoin could be ready for one more attempt to break the diagonal trend line formed since the peak at $19K earlier this year ($7100 range), otherwise it would fall straight through the floor into the $5K range.

Now more data has come in and I am happy to report that BTC is up approximately 12% since last week and following my chart line with scary precision. All eyes are now on the $7000 range where the diagonal trend line will either be broken or rejected.

BTC Technical Analysis for July 8 2018
BTC following my line from last week with scary precision.

Horizontal resistance is currently being met at the $6700 range where lows were formed in back in February and April, this is the first major obstacle on the road to breaking $7200. Considering this resistance was formed months ago, we can assume it will be difficult to break.

So how can we determine the chances of breaking through this resistance? I look to the momentum oscillators RSI and MACD on a smaller time frame.

4 Hour Momentum

Looking at the 4 hour chart, I immediately notice both indicators are showing lower highs relative to the price action over the last few peaks. Looking from early June however, we see a steady increase of higher lows indicating momentum has been building for a while.

Bitcoin 4 Hour Momentum Chart July 8, 2018
Bitcoin 4 Hour Momentum Chart.

MACD on the 4 hour is oscillating above the 0 line and the RSI is in a range of about 40-60. These two values indicate neutral / semi-bullish momentum in the short to mid-term, I will be concerned if lower highs continue on the oscillators or if the 0 line is broken on MACD.

2 Hour Momentum

Zooming in on the 2 hour data makes the lower highs on the momentum indicators more obvious. What is most interesting here is that momentum lost during 6/29-7/5 bounced back around 7/6 and 7/7 which supports the possible second push upward seen in the 4 hour chart.

Bitcoin 2 Hour Momentum Technical Analysis July 8, 2018
Bitcoin 2 Hour Momentum Chart.

Bottom Line

It appears BTC is well on its way to try and break $7200 and possibly set off the next major bull run. I will be keeping a close eye on momentum as price makes its way through the $6700-7100 range as the resistance here could prove critical.

The small bounce in momentum is promising which makes me bullish in the short to mid-term. Until price can break through current resistance my stance is neutral in the mid to long term.