Looking at a much larger time frame can give perspective. A fellow crypto investor pointed out the monthly chart on BTC yesterday and I thought it was something worth giving another look.
The Bear Has Been Broken
If you look at the monthly chart of bitcoin in this post, you will see that long-term downtrend has been broken (identified by the blue trendline).
This occurred with the April breakout and now May is looking to be a third month of gains. We shall see how that plays out, but price action does look a whole lot better than just two months ago.
Levels upon levels
Forgive all the black support and resistance lines on this chart as those were drawn on the daily timeframe and I don’t want to erase all of my work.
You can see how many of these line up with clear price points on the monthly chart though. This price points I will always give more weight than the others.
When you have congruent data across multiple time frames you get higher probability outcomes.
Strong Support & Resistance
With the above said, we can see that support around 3,200. Not only was it a clear level on the daily chart, but also on the monthly. I like that as a foundation. If things were to “get ugly” again, that would be the ultimate downside I would be concerned about.
As for the upside, well looking at the monthly the next real top isn’t until the 7,750 area. There are still other price points to keep in mind though.
The line on the daily chart that corresponds with the one just below 6,000 on the monthly chart you are looking at is the next clear point of price action. It represented a clear support level on the monthly chart and it will put up a fight if price approaches that level.
Let’s hope we get to see that test happen as it means some more upside from current prices.
All in all, the price action on bitcoin looks a heck of a lot better on a larger view. Anything can happen though, which is why we pay attention to key price points on the up and downside.