Bitcoin skyrocketed to a fresh four-and-a-half-month high of 5052 earlier on Tuesday, finally creating an impressive bullish rally.
Currently, the price is returning some of those gains but remains above the 23.6% Fibonacci retracement level of the upleg from 3313 to 5052, around 4642. However, some of the technical indicators are losing momentum after the sharp rise in the 4-hour chart. The RSI indicator seems to be overbought, as it is turning lower above the 70 line, while the stochastic oscillator dropped below 80, creating a bearish cross within the %K and %D lines. On the other hand, the MACD oscillator is still strengthening its momentum above the trigger and zero lines.
In case of an upside run once again, immediate resistance is coming from today’s high. More advances could send prices towards the 5160 barrier, registered on November 2018, while the next target is coming from 5575, where it topped during the same month.
On the flipside, if bitcoin retreats below 23.6% Fibonacci, support would be faced near 4554, before touching 4470. Another step lower may reach key support at the 38.2% Fibonacci of 4380.
Overall, Bitcoin created a strong movement after a long time, but indicators suggest a possible bearish correction in the near term.
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).