Bitcoin closed the week with a “buy” signal on the Sharp Shooter candles.

This is quite bullish for a number of reasons, we’ll go through today. We’ll try to draw out what it means for the week ahead too!

Here’s why it’s bullish…

1. Bitcoin regained the $61K range

Going into the FOMC meeting on Wednesday, bitcoin broke the $61K range low that it’s been in for the last two months.

With that break, we noted in our wednesday newsletter, “How Low Will Bitcoin Go?”, that bitcoin either needed to regain the range or we’d start looking toward the $50K region for suppport.

The good news is that bitcoin did just that—it bounced right back above the range low. The Fed softened, saying they didn’t expect any hikes and were going to consider cuts if the labor market keeps softening, so the market took that as bullish, and the dollar sold off.

2. Bitcoin broke the downtrend

This was along several dimensions:

• Price downtrend

• RSI

• Trending dots

Another reason we’re getting bullish again.

3. The weekly did not breakdown

On the weekly chart, bitcoin stayed above the trending dots, and RSI didn’t put in a lower low.

What we’re looking for next

The latest price action is quite bullish, so the next thing we’re looking for is where bitcoin will make its higher low on price and RSI.

The primary case is that the low is in at $56K and so the closer price comes back to $56K, the better risk/reward ratio on a long trade. However, there are no guarantees, which is why you always want your stops to manage your risk.

Most bullish scenario: $63K higher low

The bull case would be to look at the price action from Jan to Mar.

In that case, bitcoin’s RSI came down as low as it went last week. Then price regained the trending dots, and flipped it to support. RSI also stayed above 50, using 50 as its support.

If this time is similar, then price would above above $63K now and head higher.

Bull scenario: $59-61K higher low

Another potential is that price rejects at the 50DMA and then retests the range lows and 100DMA as support and bounces from there. This is quite common when price breaks back into a range.

Bear scenario: lower low at $50K-$53K

The other scenario we still have to acknowledge is that price could still make a lower high and a lower low over the next two weeks.

In that case, we’d still be looking to the 50-$53K area as support.

Hope these scenarios were helpful, and good luck in the week ahead!

Jesse’s praying to the Market Makers for us all:

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Disclaimer

The contents of this newsletter are expressed in my opinion only, none of which is financial advice. Always do your own research as this information is intended for educational & entertainment purposes only.