Bitcoin Bulls Holding Strong | JP Morgan Recognizes Bitcoin’s Intrinsic Value

Bitcoin Bulls Holding Strong

Last week, Bitcoin retraced roughly 16% in only four hours. Since then, it has climbed all the way back to a price of $7.7k. For now, the Bitcoin bulls are holding strong as price temporarily consolidates. Last week’s article analyzed the flash crash seen in Bitcoin on May 17th. After rebounding to $7.7k, it appears the flash crash was most likely a result of one or two large sellers and does not represent the majority of traders in the market.

Looking at the daily chart above, Bitcoin is currently on a red 4 of 9 candle. This is characteristic of a trend consolidation. Additionally, we have not seen a red 9 on the daily chart since December 10th, shortly after Bitcoin broke below $6k. There’s a chance Bitcoin’s price will decrease to reach a red 9 candle, however it would not be characteristic of the last five months of the trend. Within the last five months, Bitcoin has typically flipped after reaching a red 4 or 5 on the daily chart. The sequential indicator may be implying bullish price action within the next two days.

4 Hour

The 4 hour chart above is in a similar circumstance as the daily chart. Price is holding support at the 50MA (blue) with the 128MA (green) below it. Buying the dip off of the 128MA (green) has been a very successful bull market strategy throughout the history of Bitcoin.

Weekly

The sequential indicator on Bitcoin’s weekly chart recently recorded a green 7 of 9 candle. Therefore, sequential is telling us there are likely two weeks of bullish price action left before a possible reversal.

Cryptocurrency News

In a recent Bloomberg article, JP Morgan analysts wrote that Bitcoin is currently overvalued relative to its intrinsic value.

“The best-known cryptocurrency has surged beyond its “intrinsic value,” mirroring a similar move in 2017 which preceded a slump.”

While it isn’t surprising JP Morgan believes Bitcoin is currently overvalued, the fact that JP Morgan sees intrinsic value in Bitcoin at all demonstrates how perceptions have changed since Jamie Dimon called it a fraud in early 2017.

Conclusion

For now, the Bitcoin bulls are holding strong. Support remains at $7.7k and $7.3k. If price can break above critical resistance at $8.3k, there are no major resistance levels until $9k. The most critical level for the bulls on the macro trend is the 0.382 fibonacci level at $9.4k. If the bulls can break through this barrier and form support, there is a chance price can bubble to new all-time highs. Also, price recently broke above the 50 week moving average at roughly $6k. Historically, buying the dip off of the 50 week moving average has been a very successful bullish strategy.

Disclaimer: I am not a financial advisor. Nothing in this article should be taken as financial advice. The author of the article owns Bitcoin.