Bitcoin is approaching again the two-month high of 4032, exiting from the Ichimoku cloud.
According to the stochastic some weakness could emerge as it seems to be overbought, however, the RSI indicator is still sloping upwards approaching the 70 level in the 4-hour chart.
Should the price extend higher and successfully surpass 4032, it could find immediate resistance at the 4085 barrier, taken from the peak on January 8. Also, an advance above this region would increase speculation that a bullish move is in progress towards 4210, where the market topped on December 24.
On the other hand, should the bitcoin stretch south, immediate support could come from the 40- and then the 20-simple moving averages (SMAs) currently at 3947 and 3928 respectively. A step lower could drive the price down to the 23.6% Fibonacci retracement level of the upleg from 3313 to 4032, around 3864, before resting near 3826.
To sum up, the very short-term risk for Bitcoin is tilted to the upside, as the upward extension off 3313 hints that buyers are still active in the market, despite that the technical indicators seem to be in confusion.
by Melina Deltas, XM Investment Research Desk
Melina joined XM in December 2017 as an Investment Analyst in the Research department. She can clearly communicate market action, particularly technical and chart pattern setups. Her technically focused method looks mainly at price action across multiple time frames to capture big moves that develop over the years. She has more than 3 years of experience in analyzing financial markets, specializing in forex, indices, and commodities.
Melina studied Pure Mathematics at Lancaster University and has a Master’s Degree in Monetary and Financial Economics from the University of Cyprus. Currently, she is an associate member of the Society of Technical Analysts (STA) and a Certified Financial Technician (CFTe).