While the limelight continues to shine on bitcoin, there are other crypto tokens that might also deserve your attention. One, in particular, is Bitcoin Gold.
The bitcoin hard fork climbed as high as $32.54 on June 26 before succumbing to profit-taking. At that point, the cryptocurrency was up by over 154 percent for the year. It is down almost 20 percent from the 2019 high currently. However, our analysis suggests that the current pullback is potentially nothing but a setup for a big comeback.
Bitcoin Gold is a market that’s raring to start its bull run.
A quick look at the daily chart shows that the cryptocurrency has tapped resistance of $30 five times in the last eight months. In theory, this supply area should be exhausted. It won’t likely survive another onslaught from the bulls.
The five taps on the resistance have enabled Bitcoin Gold to print a large inverse head-and-shoulders reversal pattern. Currently, the cryptocurrency is consolidating just below resistance of $30. This is a bullish signal as it indicates the refusal of the market to revisit lower levels.
One key detail to mention is the exponential rise in volume on July 18. Looking at the history of Bitcoin Gold, the volume on that day is the largest single-day volume ever recorded on Bitfinex. This is an ultra bullish signal. The volume not only shows that the market is in the latter stages of base building, but it also shows that buyers are positioning at current levels in anticipation of a big move up.
It appears that Bitcoin Gold is not only bullish in the short-term. We switched to the weekly chart and saw additional bullish signals.
In addition to the inverse head-and-shoulders pattern, we can see the cryptocurrency respecting the weekly order block of $24. The weekly support was tested last week with extremely heavy volume. Nevertheless, bulls held their ground and did not even allow the market to touch $24.
The price action affirms our view that Bitcoin Gold is consolidating or creating a base just below the resistance. This puts the market in a very good position to finally take out resistance of $30.
On top of that, the weekly RSI is printing a bull pennant. This is a pattern that suggests the continuation of the trend. With the RSI in a strong uptrend, it is probably only a matter of time before bulls flex their muscles and break out of the continuation pattern.
Watch out for the RSI breakout as it will likely precede the breakout from the inverse head-and-shoulders pattern.
As Bitcoin Gold flashes multiple bullish signals, we believe that it could be just getting warmed up. If you’re interested to buy positions, you might want to do so once the market takes out resistance of $30. A strong move above this level will likely push the cryptocurrency to our initial target of $56. Take that out, and $108 is the next target.
Disclaimer: This article is intended for informational purposes only and should not be taken as investment advice.
Last modified: June 23, 2020 2:44 PM UTC