Bitcoin (BTCUSD) 1H Chart 3/23; click to enlarge
At the end of last week, bitcoin fell to 247 after failing to return to 300 at the beginning of the week. After this sharp slide, litecoin was consolidating above 250 and under 270. Over the weekend, volatility died down and price was coiling around 260, maintaining the bearish momentum in the near-term as the 1H RSI held below 60.
As we begin the global trading week (3/23 in Asian), bitcoin uncoiled and broke out to the upside. In the 1H chart we can see that price is now threatening to break the highs over the weekend. A break above 270 should liberate the cryptocurrency from last week’s bearish outlook, especially with the 1H RSI already above 70, which shows initiation of bullish momentum in the near-term.
Now, if there is a pullback, price should hold above 260, preferably above 265, and the 1H RSI should hold above 40. This would reflect maintenance of the bullish bias and momentum that we are seeing to start the week. We should look for this especially if price falls back down from the 280-285 area, which involves the 100-period SMA in the 4H chart, and a previous support area, as we can see in the 4H chart below.
Bitcoin (BTCUSD) 4H Chart 3/23
(click to enlarge)
The 4H chart shows bearish momentum. If the 4H RSI breaks above 50, and price starts holding above 285, we are likely going to see bullish continuation, especially if this also breaks above the falling speedline seen in the chart above.
Another reason I am leaning towards the bullish outlook at least this week is that in the daily chart, the bullish outlook since mid-January is still in play.
Bitcoin (BTCUSD) Daily Chart 3/23
(click to enlarge)
Yes, we can argue that price broke below a rising speedline, but traders were unable to extend the breakout. Price still remained above the support/resistance pivot area, and above the 50-day SMA. The daily RSI held above 40. For the most part, the short-term bullish outlook is still intact. Thus, the breakout to start the week is a bullish continuation signal in the short-term at least back towards the 300 handle. Above that, the 321 high on the year will be in sight.
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