Bitcoin Price Key Highlights
- Bitcoin price staged a rally sharp enough to break past the falling trend line on the 4-hour chart.
- In addition, a small double bottom has formed on this same time frame to signal that an uptrend is underway.
- Technical indicators, however, are suggesting that the declines could still resume.
Bitcoin price broke past the descending trend line and the neckline of a small double bottom to signal a possible reversal.
Technical Indicators Signals
The 100 SMA is still below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. This suggests that the selloff is more likely to resume than to reverse.
The shorter-term moving average appears to be holding as resistance for now, but a bullish flag also appears to have formed. This is typically seen as a continuation signal and a break higher could lead to a test of the 200 SMA dynamic inflection point. A break past this area could be enough to confirm that a longer-term uptrend is taking place.
RSI is already turning lower from overbought levels to indicate that selling pressure is building up. Similarly stochastic is also pointing down to signal a return in selling pressure even without hitting overbought conditions. If bears return, bitcoin could still slump back below the trend line and resume the slide.
Bitcoin appears to be off to a fresh positive start so far this quarter and month as it staged a sharp rally. It may have also gotten a boost from bullish remarks by BitMEX co-founder Arthur Hayes who predicted that it will reach $50,000 by the end of the year. He cited:
“We could definitely find a bottom in the $3,000 to $5,000 range. But we’re one positive regulatory decision away, many an ETF approved by the SEC, to climbing through $20,000 and even to $50,000 by the end of the year.”
He added that the recent dips in price could encourage more investors with more capital to hop in at better levels.
Bitcoin image via Shutterstock.