May will be a new Bitcoin Bull rally start point or a big disappointment. How far Bitcoin may drop if this Bull rally will FAIL
In just a few moments in this video I want to discuss with you a very important chart of bitcoin that is a long term chart of bitcoin and I want to show you why this chart is now very important for bitcoin. Something very interesting we're seeing now on this chart that's in just a few moments before I did that deal. I just want to give you some context. Give you some background what's been happening recently. Now, first of all, after bitcoin dropped down to this important level, the 21 daily moving average that you see their bitcoin decided to ignore all the bearish signals that we saw at this point and essentially blast through higher. And very interestingly now it is now closed above a key level. Okay. It's closed above the 50 simple moving average on the weekly timeframe, which is quite significant by the way.
Uh, last week for example, we saw bitcoin hitting the 50 moving average, getting rejected from that level, which is, uh, which was a bearish signal, but very interestingly now bitcoin bulls, the Bulls now pushed bitcoin above that 50 weekly moving average, which is quite significant because that level usually acts as a major resistance level for bitcoin. And indeed did most markets that could look, for example, what happened, uh, back in the year 20, 2018, as you can see right there in 2018, bitcoin held that 50 moving average and dropped from that level. And now it's getting above that level and that's quite significant. Now let's go back to this chart over here. What I want to mention is something quite important, which is that in the last video that I posted about Bitcoin, I earned a lot of caution and I said, look, yes, bitcoin has dropped down, uh, to support, but look, it's holding the 21 moving average.
You see right here? And I said, look, unless and until bitcoin closes below the 21 moving average, we should not get too confident about a drop in bitcoin. In fact, here's the video clip for you right now. Let's just listen to it for just a few seconds. Bitcoin has not yet closed below the 21 daily average, just holding that level. He's hugging that level. So I don't want anyone to become overconfident and to think that yes, we're definitely moving lower. No, there is no certainty because bitcoin is still holding above the 21 daily moving average. The Blue Line you see right there. I want to urge a lot of caution here. All right, so let's not get overconfident here. As long as Bitcoin holds above the 21 daily average, the probabilities that bitcoin is going to drop still remains below 70% okay? So that's one thing also in the member's video.
So here's the members via that had posted, but essentially what I was saying last week in the members video was that bitcoin could see a move back towards the 61.8% retracement. And I said, if it moves, I said, if bitcoin moves above the 61.8% retracement, then we could see a move above the (560) 025-0800 levels. In fact, here's a small section of that member's video. Here it is for you so we can see we've had the 61.8% retracement. If bitcoin can get above that, if bitcoin, again, if it's going can get above and close above the 61.9% retracement and stay above it, that could increase the path of least resistance increased the likelihood that we could move towards above the highs that we made and that could increase the likelihood you might hit 5,800 which is the 1.272 extension of this drop and we might even go with go towards the 6,000 levels.
Okay, let's turn our attention now. So what this potentially means for bitcoin first scenario that I mentioned in that video you may recall, was that if bitcoin's sees a move, here's a section of that video you see here. I said if bitcoin moves above the 6,800 level and stays above 6,800 then you potentially have to conclude that bitcoin has entered a bull market. Now I have to tell you, but that I still think that this first scenario is rather unlikely. I think it's improbable. I still think that it's rather unlikely on the first attempt that bitcoin is going to be able to succeed to go above 6,800 and stay above it. So the first scenario I still consider it to be rather unlikely. That brings us to the second scenario. Now the second scenario I'm going to discuss with you in just a few moments, so bear with me a few seconds, but I want to discuss also the third scenario in that video.
I mentioned a third scenario for bitcoin which could show we're going into a bull market. In fact, I still think it's the more realistic and more likely scenario, which is that bitcoin would likely see resistance near the 6,000 levels, maybe just above or under 6,000 levels and then drop back down to a major support. As you can see here on this chart. So essentially in scenario number three, bitcoin quit, see resistance and then drop back down to major support near the 4,000 to 4,200 levels. And if then we see a bounce, if we see a strong bounce off of those levels and guys you can see here on my chart right here, if we see a strong bounce off that support level and making a new low, making a higher low, in other words, then we could conclude that potentially we're entering a bull market.
Again, I still think that out of the three scenarios I mentioned in that video, the third scenario, the one that I'm showing to you here is probably the more likely the more probable scenario. All right guys. So let's go now to scenario number two because that's also very interesting. In fact, this is something we need to really consider now as something which has potential. So in scenario number two, while we said, in fact, let me just bring you the chart. So what you see here is the monthly time frame chart of bitcoin. So every bar you see here is one month of bitcoin. And what's interesting is this, that on the monthly time frame, this is very interesting that in the month of April, look at this. The month of April has now closed above the 21 monthly average. Now, in case you're wondering, well why is that significant? I explained this in my last video, which is this, if we just go back, let's go back to the year 2015 okay, here it is.
So this is the year 2014 and 15 take a look at this and what you will see here, something very interesting after the last bear market. So after the last bear market that bitcoin suffered in 2014 it made a low, it bottomed out in 2015 but look what happened here. Here's how you could have known that bitcoin has started a new bull market because of what happened just some months later, which is that notice on the first attempt, bitcoin did not manage to get above the 21 monthly average. It's failed. But on the second attempt, on the second attempt, the bitcoin succeeded. As you'll see here, bitcoin closed above the 21 monthly average in October of 2015 and then make another high. In other words, a second close above the monthly average. Okay? Above the Blue Line you see here, as I mentioned in my previous video in technical analysis, if you see two consecutive closes above the monthly average and you want to see two positive bars, two green bars above the 21 monthly average, that actually has a high probability that we've entered a bull market.
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I look what happened after that. As you'll see after that move, bitcoin started the major bull market higher and when I met you eventually went up to 10,000 and 20,000 so what this means, if you look at the bitcoin chart right now on this monthly chart right now, you will see that in April we did succeed. In fact, in closing above the 21 monthly average, as you'll see right there. By the way, I should just mention one thing that's only on the trading view charts on the trading view charts. Here, I'm using bits stamp on the muck of timeframe. We did close above the monthly average in April. However, on other charts, for example, the charts off empty four. If I look on the monthly timeframe, now look on the Mt four charts. It did not close above the 21 monthly average. So we're seeing some discrepancy here.
Some charts are in conflict. Uh, so Mt. Four charts and most other charts are not showing a close above the 21 monthly average, but the trading view charts are in case you're wondering, well, how do we know with chart to choose? I would say just keep it simple. Just choose one chart and go with it. So we'll keep it simple. And for the sake of simplicity, I'm just going to go for the moment on the trading view charts. Although I'm not saying the Mt four chart is wrong either. Okay, but any case keeping it simple, we have at the very least, we have the April month closing above the 21 monthly average, which means this, as I'm sure you've probably guessed this by now, if we see a positive close, in other words, the green bar, not a red bar, but a green bar in the month of May, above the 21 monthly average above this blue line you see here, right there, the Blue Line currently is at 52 86 if the month of May also closes above the 21 monthly average, the Blue Line, then that shows a high probability that we could be entering a bull market in bitcoin.
All right guys, so we'll have to be a patient. Now let's see how the month of May turns out. Okay? Uh, for example, if bitcoin fails to close above its 21 monthly average, I'm a close below it. If we do that, then no, then the probability of a bull market has been reduced. But bottom line is this is something that we have to watch. So we're going to keep an eye on the monthly timeframe chart and let's see if we get two consecutive closes above the monthly, uh, Ema, the monthly 21 moving average. By the way, I just want to also mention this, that despite this rally we've seen on bitcoin currently at the moment, you can see that bitcoin is hitting resistance. This trend line, okay, this blue line you see here, all right, uh, this blue line, we're hitting this resistance again, this is probably is the second or third, maybe the third time we're hitting this resistance.
And you can see that bitcoin for the moment is struggling to get above this trend line, this blue line, you see her, and not only that, we're going up, you can see this is rallying and making new highs, but on bearish divergence, you can see on Rsi, the Rsi is making lower highs. So we got up bearish divergence, which is a sign of weakness in this rally, in this trend. Now, I should just say if bitcoin managers to successfully close above the trend line, if it gets above this trend line here, this blue line, that could negate the divergence and it could push towards the 6,000 levels, but in any case, we do have bearish divergence, which means also this bitcoin has to protect this support level. The support level I mentioned in the previous video, which is near the 5,000 levels. If bitcoin is going to be able to continue this rally, it needs to protect these lows near 5,100 to 5,000 if it breaks these lows, if it breaks the support levels, then potentially we're going to see a drop further lower towards the neck support levels.