Bitcoin has been able to sustain this rally for just a few more days and through the weekend. That is not to say though that it is not losing some steam. Bitcoin has been overbought on many time frames for a while and is looking like it has finally hit a peak. So this bitcoin rally is losing steam and we are going to check it all out on the charts!
Momentum has topped out
Looking at the market cipher indicator on the daily time frame, we see that the RSI and the MACD momentum have topped out and is calling for a sell signal. Also the Money Flow Indicator that in this case is also calculated with the RSI is showing a downturn in the rising momentum. This means that money is starting to flow out of the asset.
Need to build market structure
Buying rallies like we have seen just cannot hold up forever without a correction to retest previous levels for support. This helps build market structure at these levels. If the price shoots one way or the other, in most cases the market has to build up structure at the prices that it blew through. So, on an uptrend, it needs to come back and fill orders that were left behind and build market structure at those levels. This gives bulls another chance to get on the boat for the next trip to the moon!
Short term consolidation as we wait for a move
Looking at the short term time frames, we have hit some major consolidation between 20,000 and 23,000. This last little pop has exhausted buyers and momentum is looking like it is turning to the downside. Currently waiting on a crossover to the downside of the Squeeze Momentum indicator on the 30 minute time frame (left) and confirmation on the market cipher indicator with MACD, RSI, and MFI heading to the downside.
Once the cross happens I will be looking at the 5 minute time frame (right) to find a good entry to the short side if the price decides to break below the VWAP and retest. If it retests then drops again, we are in short city for a while until the price can correct and fill those orders at lower prices.
But don't take my word for it, do your own research and don't get rekt! Make sure to follow your trading rules, and if you don't have any, well, it's time to get some!
Nothing said is financial advice.
This is for educational and recreational purposes only!
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Posted from my blog with Exxp : https://coin-logic.com/bitcoin-rally-is-losing-steam-monday-btc-technical-analysis/