Our good friends over at Bitcoin Bravado just published their BTC Monthly and are looking at the trends showing in the picture above. As all of you bitcoin traders and crypto investors can see on the 1 minute chart above, the smaller red candle is overshadowed by the larger green candle as we approach the monthly close tomorrow.
BTC opened the month at $6,152 and moved lower than the previous monthly close. Bulls stepped in however, and began to buy the dip which pushed the price higher at the close of last month. As we've discussed, bullish sentiment has taken over.
So is this a bullish engulfing pattern?
Sort of…technically an englufing pattern doesn't require the entire range to engulf the bearish candle (the wicks) however most proponents of the pattern will tell you that it's stronger when the entire pattern (body and wicks) engulfs the bearish candle.
Why is this important?
A bullish engulfing pattern indicates a potential reversal of community sentiment . It's a very important candlestick pattern because it points to a trend reversal.
In order to be valid, the market must be in a clearly defined downtrend, include a bearish candle followed by a bullish candle, and the bullish candle must engulf the entire body of the bearish candle – all this criteria has been met.
Whether you care about the candlestick pattern or not, the monthly candle looks very bullish for continued upside, though we're hoping for more consolidation.
Though shorter term we expect some downside back to the mid/low $7ks, the monthly looks very strong, if volume continues to increase so will the price.
The Bitcoin Historical Volatility Index is showing that BTC volatility is at it's lowest point in a few weeks and each time it has hit this range we've seen volatility increase. We expect a decent candle from Bitcoin today. Most short term analysis we've done is pointing to downside, so we'll close this long in the profit by moving our stoploss up and setting lower long bids as indicated.
What do you guys think of Bitcoin Bravado's BTC price and chart analysis? Let us know in the comments below and we will be sure to stay on top of it all in the coming days and month!