As expected, Bitcoin has ended its boring period over the weekend and things have taken an interesting turn as the price rose above strong resistance levels. Bitcoin has jumped 1.4% since Friday’s observation to trade at $232.17, a level which is eagerly watched by all market participants. And technically, the current market conditions strongly favor the bulls.
Technical analysis of the above presented 240-minute BTC/USD price chart conveys that bulls might eventually take the price higher to $245.
Bitcoin Chart Structure – As can be seen from the chart above, consistent buying has pulled the price above the previous consolidation level of $231. With this appreciation, the price has tested the downward sloping resistance line (marked in the chart) and edged lower. However, as the price maintains its higher ground, there is a high probability that this resistance may be breached on the upside and price may shoot up to $245, following massive short covering.
Fibonacci Retracements – Bitcoin is aptly using the Fibonacci retracement levels as stepping stones. First, it took support from the 61.8% retracement level of $227 and managed to cross over the 50% retracement hurdle of $231. It is currently now taking support from the 50% retracement level and challenging the aforementioned resistance.
Moving Average Convergence Divergence – The latest MACD, Signal Line and Histogram values of 1.0674, 1.0148 and 0.0526 respectively, propose that significant bullishness is left in the rally.
Momentum – The Momentum indicator reading has yet again turned positive; the reading has jumped from -0.6700 to 2.4100.
Relative Strength Index – Bitcoin is maintaining the underlying strength even as it struggles to leapfrog the resistance. The latest RSI value is 63.0674.
Conclusion
Bitcoin’s chart structure and technical indicators point toward a strong positive undertone. Traders should go long on dips for a target of $240. Create fresh long positions on a breakout above $233 as well. Expect volatility to remain relatively subdued.
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