Bitcoin Bull Market Confirmed for 2019

Yesterday with bitcoin price advancing past $8600 a new bitcoin bull market was confirmed by point and figure charting.

PnF Bitcoin Breakout

You can see the weekly red downtrend line is broken by two boxes on the weekly PnF chart. This upside break out of a bearish resistance channel is a very strong buy signal in PnF charting.

For risk tolerant traders the point and figure chart with more aggressive settings actually gave a buy signal at $4200:

bitcoin point and figure chart

Many traders would delay a long entry until a Golden Cross of the moving averages, but an early aggressive long position at $4200 would have paid off quite well. It is a question of risk/reward tolerance.

Point and Figure charts are a powerful TA tool, more so since not everyone is using them and they are concerned with price, not time. See Point and Figure Charting: A Basic Introduction for more information.

Golden Cross

Back on April 22 we had a bitcoin Golden Cross when the daily 50 moving average crossed over the 200 MA. Golden Crosses signal a bull market.

Golden Cross

Technical Analysis

A new bitcoin bull market was suggested when the Golden Cross happened in April. In the past we have seen bitcoin price drop back below the 200 MA so aggressive traders took long positions. More conservative traders waited for confirmation.

We got that confirmation yesterday on the weekly PnF (point and figure) chart when bitcoin price broke above $8600. There is no doubt we are now in a new bitcoin bull market.

Can price drop again? Of course, but the charts are telling us that any dip in price is now a buying opportunity.  It is up to the individual trader on where to set his stop loss in case of a downturn. Consider this chart for an example:

One place to exit a long position would be at the low of May 17 shown by the horizontal white line. A stop loss sell order at $7200 would be below the blue 20 MA, is conservative but would give a long position some room for correction. Of course each trader must use his own judgment on where to go long and where to exit.

We have been waiting a year and a half for a new bitcoin bull market. This new one is arguably sooner than expected but a trader who uses technical analysis follows the charts until proven wrong.

Price Levels To Watch

Fibonacci retracement levels are used by many traders to set profit targets and/or protective sell stops. Here is a chart from the all time high of $19,666 to the bottom of the bear market at $3122:

fibonacci target levels

Next overhead resistance to watch is the 38.2% Fibonacci level at $9442, followed by the psychological barrier at $10,000. Other important levels to watch are on the chart.

In the event that bitcoin price advances past the last all time high, Fibonacci extensions can also predict likely price targets. During the last bull run Fibonacci extensions combined with 3 day RSI helped traders avoid taking profits too early.  Here is a chart with the most common Fibonacci extensions from the last all time high to last low:

You can see from the following chart that during the last bull market bitcoin price reached the 17.944 Fibonacci extension which is off the chart above but would be $300,000.

lastbullmarket

Conclusions

We have confirmation from several technical indicators that the bitcoin bear market is over. Traders will be looking to buy more on any price pullbacks.

It is unknown when bitcoin price will reach the previous all time high. However we can see from the Fibonacci extensions above that price is likely to advance to the 1.618 Fibonacci extension at $29,890 minimum if the last all time high is surpassed. If price action is similar to the last bull market: price goes parabolic to the 17.944 Fibonacci extension $300,000 is possible.