Bitcoin Reverses after Breakout
Bitcoin started the week with a bearish breakout, falling below last week’s low of 470, and thus opening up a bearish outlook toward the August-low of 442. However, price held above 456.30. After a coupe of bullish swings bitcoin eventually broke above a falling trendline and all of the 200-, 100-, and 50-hour simple moving averages (SMAs). The 1H RSI has also climbed above 60, showing loss of bearish momentum. The market is poised to test the next resistance factor.
When we look at the 4H chart we might expect some resistance in the 495-500 area, where there will be a falling trendline originated from the 534 high. Also note that the RSI is back to test 60 again. Therefore the bullish outlook is not in the clear. Now a break above 500 might shelve the bearish outlook especially if the 4H RSI clears 60. In this scenario, we have a bullish outlook toward 534. A break above 535 then puts bitcoin at the crossroad. The 535-560 area represent the lows from a previous descending triangle, which might provide resistance. For now, let’s monitor whether this bullish attempt will break above 500, because if not, the market is still neutral-bearish.
Litecoin Threatens Triangles
Let’s go straight to the 4H litecoin chart, where we see price pushing above some key resistance factors. There are two triangles, one in side the other, and both their resistance lines are being broken. If price extends above 5.30, litecion would also clear the 200-period SMA, which opens up a bullish outlook in the short-term, with upside risk toward the 6.19 high. If price pulls back and then holds above 5.0, we will have a stronger case for this short-term bullish outlook.
It will take a break above 6.20 to put away the bearish outlook and introduce a bullish one in the short-term. For now, the bullish outlook is short-term, with a prevailing bearish trend still in play for the medium-term.
(click to enlarge)
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