A new opportunity for Bitcoin bulls?
Bitcoin has been riding the red 200-day moving average line and using it as support since December. As you can see in the weekly chart below we are just starting to accelerate, albeit slowly, from this support. So does this signal a strong recovery on the cards?
As you can also see in the weekly chart above, we have a downward-sloping trendline from May 2018 which should act as resistance to this recovery.
If we zoom into the daily chart below we can see Bitcoin is approaching not only the downward-sloping trendline but also a confluence of Fibonacci resistance all at the same area of 4100 to 4150. Obviously bulls must see a sustained break above this important resistance area to start to build upward momentum. A break above the December highs of 4235/4265 would be further bullish confirmation and should lead the cryptocurrency up to 4500.
Zooming again to show price action over the last three months only, we can see the currency forming a bullish channel, indicated by the blue trendlines. As I write we are testing the lower trendline so it is obvious that bulls must defend the 3900 area if we are to remain in this short-term bull trend.
A sustained break below 3900 would destroy the bulls’ confidence again and risks a slide to the 100-day moving average and Fibonacci support at 3750/3700.
I want to zoom in just a little more so you can see the positive signal from the purple 55-day moving average crossing above the blue 100-day moving average.
Bulls still have a huge challenge ahead but it is the best opportunity they have seen for a sustained recovery for a very long time. Can they push prices through the important resistance at 4100/4150?
Technical Analyst & Trader
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