Today, Bitcoin saw a huge bounce after the bulls defended the $6500 level. Most of the other major cryptocurrencies have followed suit, including Ethereum.
ETH has experienced a massive 15% bounce but the bulls need to be careful and avoid a possible ‘dead cat bounce’. This ‘pattern’ happens often when an asset is in a massive downtrend and sees a bounce. Usually, the bounce originates because of sellers buying Bitcoin back to cash in their profits.
A dead cat bounce is followed by another leg down which takes most investors by surprise. The trading volume of this move has been really good though and it has seen a good amount of continuation. It wasn’t a 1-hour move.
The RSI has barely cooled off and we could see more bullish action before another leg down if that’s the case. The 4-hour chart is currently consolidating at $146 and the bulls are hoping to defend the 12-period EMA and see continuation above $151.69.
Looking at the weekly chart, we can clearly see that even though, the bounce has been impressive, the chart itself is still showing a bear flag currently. The bulls need a lot more work if they want to change this trend. The volume is also overall, not impressive.
The monthly chart is still looking for that higher low compared to $80.6 and the bulls are getting impatient.