Bitcoin (BTCUSD) 1H Chart 3/4 (click to enlarge)
Bitcoin has been rallying since the end of last week when it broke above a tight consolidation under 240. Let’s take a look at the 1H chart.
Looking at the price action, moving averages and the RSI in the 1H chart, bitcoin appears to remain bullish this week. However, all those elements are showing signs of a reversal during the 3/4 session.
The 1H chart shows that price found a double top under 285 and is threatening to retreat further from this price top. The RSI has broken below 40, which suggests loss of the prevailing bullish momentum since last week. It seems like the 100-hour SMA is providing some support, but if that is taken out, we will have further bearish bias. Also, if there is a pullback, we should monitor the 275 area for resistance. Ability to hold below 275 would indicate respect for the double top, and would open up a bearish outlook in the short-term, with the first target around 255 before exposing the 240 area.
The 1H chart shows the cluster of support factors (200-hour SMA, a rising trendline, a previous resistance area) around 255.
Bitcoin (BTCUSD) 4H Chart 3/4
(click to enlarge)
The 200-hour SMA, is the 50-period SMA in the 4H chart. If price can hold above the support cluster around 255, it would hold above the 200-, 100-, and 50-period SMA in the 4H chart, which would preserve the bullish bias. If the 4H RSI also holds above 40, the bullish momentum from last week into this week will remain in play. In this bullish scenario, there would be pressure towards the 300-310 highs as well as the 2015-high at 321.
On the other hand, a break below 255 is going to open up the 235-240 area. Below that there is support around 210 before bitcoin can expose the low on the year around 153.
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