Bitcoin ended January with a bullish attempt, which continued into this week as we can see in the 1H chart.
Bitcoin (BTCUSD) 1H Chart 3/4
(click to enlarge)
Here are some bullish signs:
1) Price action is clearly making higher highs and higher lows, breaking above consolidation ranges and then bouncing off of them as support.
2) The 200-, 100-, and 50-hour SMAs have gotten into bullish alignment and are sloping up.
3) The 1H RSI has tagged 80, and although it has not held above 40 to show strong bullish momentum, it has failed to tag 30 to show any bearish momentum.
Bitcoin hit 285 today, a $50 point rally from the end of last week. As noted in the previous bitcoin article, BTCUSD is heading towards the 300-310 highs made in January.
Bitcoin (BTCUSD) 4H Chart 3/4
(click to enlarge)
Bullish Projection: The 4H chart shows price rebounding after making a low around 153. If bitcoin is to return above 300, it might also head back to the 2015-high around 321. Above that, there is a resistance pivot just under 340. Although a swing projection would target the 360-70 area, we should probably limit the bullish outlook to this area just under 340 because the prevailing trend throughout 2014 has been bearish.
Watch for a Pullback: Now, even before looking at the 2015-high, we can see that the daily RSI shows overbought condition. With the 2014 trend being bearish, we should respect this especially if there is a bearish divergence. If there is a pullback, we can look for price to test the 250 area. If bitcoin can stay above 250, we would have another bullish slingshot signal, which would then strengthen the outlook towards 300 as well as 321, and if the momentum carries aggressively, towards 340.
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