Let's take a quick look at how this runaway train has been performing over the past few days since we last took a look over at Bitcoin:
As we can see from the chart above, it appears that Bitcoin is actually elevating above the 'BAR' formation that we outlined previously.
Quick Review: What's a BARR Formation?
Shoutout to Stockcharts once again for providing a clear roadmap on how the 'Bump and Run Formation' is traded:
The information extracted from 'Stockcharts' is definitely worth a read for all those that have the time to do so.
The 'Bump and Run' formation, originally created by Thomas Bulkowski, is a chart formation that dictates that an increase in bullish price activity (i.e., an increase in the rate of change), leads to an even greater potential reversal at some point in the future.
Specifically, the original underlying uptrend support line serves as the most likely 'bottom' for the consolidation activity after there is a downward move (reversal) in the markets.
Dictating the Result of the 'BAR' Formation Completing
If this pattern completes, then what is shown above is supposed to be the like result.
The arrows in the photo above are drawn with ghost candles and in a way where the underlying support trends converge with known horizontal underlying supports (see below):
Taking a Quick Look at the RSI
The RSI on the daily resolution for Bitcoin looks fairly neutral, all things considered.
While it is still in the overbought range, its only just above that threshold and considering the fact we're in a bull market (for Bitcoin, at least), its probably better to adjust the overbought RSI range to a metric of 80+ vs. where it is now.
The overall trajectory is bullish, undoubtedly.
Quick Look at the Balance of Power RSI
This is a custom indicator created by Librehash.
It uses the 'Balance of Power' indicator, smoothed out with various 'MA' calculations (such as the EMA among others), then overlaid on an RSI chart to help us plot periods of exceptional buy / sell pressure.
The primary benefit of the Balance of Power indicator is that it is often quicker to diverge with price action than any of the other indicators (especially regular RSI).
When smoothed out, this characteristic is still prominent in the Balance of Power RSI metric (see below):
Curiously, the photo above shows a strong underlying uptrend for Bitcoin over the past few weeks (dating back to the beginning of September).
This is a bit surprising when considering just how much bullish price action we've seen over that time period.
But the charts are what the are and we have to evaluate things based on what the metrics are showing us versus our own personal feelings.
Exponential Moving Averages
Take a look at the EMA stack for Bitcoin at the time of writing:
In the photo above, we can see that the EMA 50 is above the EMA 100 and the EMA 100 > 200.
This is undeniably bullish (from a trending aspect).
Putting the EMA Indicators in Context
Given the length of time that we're using for the EMA indicators (daily resolution or higher), we're opting for the exponential moving average vs. the regular MA's.
The reason why is conveyed in this quick explanation from Investopedia:
Generally, these are the indicators that I personally use when gauging whether a 'golden cross' / 'death cross' has occurred (when the EMA-50 crosses above the EMA-200 / vice-versa).
In the chart above, we can see that a golden cross occurred on May 10th, 2020.
And as oft forecasted, that golden cross led to some extreme bullish price action later on.
Some Quick Food-for-Thought
While Bitcoin price action has been very bullish this year, we'd be remiss if we did not observe that the price action for many different tech-related stocks has been equally as bullish.
In fact, from May 10th to September 1st, Apple was beating Bitcoin flatout for ROI:
Above, we see Apple was up +70% from May 10th - September 1st.
Over that same period of time, Bitcoin was only up +25%.
Bitcoin has beaten gold overall this year though, for those that insist on making the erroneous comparison between Bitcoin and gold (can't call something a store of value that's not even accepted as value yet universally; gold is accepted as value everywhere in the free and enslaved worlds).
We can drum off metrics all day, the real question is, "Will the bull run continue?"
My answer to that is, 'Why not?'
Yes, Bitcoin is at a very inflated price currently, but the markets have not yet shown us anything that we should see as a red flag or credible alert that there will be an impending blow off top.
In fact, if you compare the metrics of Bitcoin right now to what they were in 2017 at this point (and in the months leading up to it), we can see that 2017 was much more extreme in terms of the values that were ticking off on Bitcoin.
Its also worth reminding that during the last ATH, Bitcoin was essentially trading at an ATH that entire year (2017). As to whether that will happen with Bitcoin at this point is...iffy. But there is one darkhorse contender out there - and that's Litecoin.
There are a confluence of factors that could lead to Litecoin unexpectedly being thrust into the spotlight, between $BCH's apparent implosion as a project, $BSV's failure and Bitcoin's absurdly high transaction fees - there's definitely room for Litecoin to zoom to the forefront...and at $63-65 ish a pop, there's more than enough room for it to breathe and start running.
But that's another story for another day at this point.