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article imageBitcoin approaches but falls back before breaking $3,400 level

By Ken Hanly     Feb 21, 2019 in Technology
In the last 24 hours bitcoin's price has approached the $3,400 level but has fallen back since. Perhaps there will be a period of consolidation before another move up or down.
CoinDesk analysis
Omkar Godbole has an analysis of bitcoin (BTC) price movements last updated at 11:33 UTC. Godbole notes that BTC's three-day chart shows a crossover of the 5 and 10-day exponential moving average (EMA). This is the first time it has done so since last July. This is a bullish sign. Both EMA's are now trending upward and this validates the bearish-to-bullish trend that was signaled by the high-volume triangle breakout that can be seen on the three day chart. Godbole believes that BTC could test the December highs which were above $4,200 soon.
There could be a slight pullback to the $3,800 level within the next 24 hours as signs of a bullish exhaustion are emerging both on the hourly and 4-hourly charts. Should BTC find acceptance below $3,614 this would weaken the case for the bulls, but this seems unlikely to happen.
Price indicator has turned bullish
On the three-day chart, the 5-candle EMA has crossed the 10-candle EMA from below. This is this first decisive crossover in many months, since July 17, 2018. At that time, BTC was priced at $7,300 and the price shot up to highs above $8,400 on July 24. Moving average crossovers, aid in identifying shifts in momentum A bearish-to-bullish trend is indicated when a short-term moving average crosses through a long--term moving average from below. Although many argue that the EMA crossovers are a lagging indicator, they also aid traders in telling the difference between bullish and bearish situations. The latest crossover confirms the bullish break above $3,800 seen earlier this week. This opens the way for a test of the December highs above $4,200.
As Godbole's article went to press BTC was trading at $3,894 on Bitstamp, pulling back from a high of $3,990 earlier.
Chart analysis
The 3-day chart shows, as mentioned earlier that the 5 and 10-day EMAs show a decisive crossover with both averages tending upward after the bullish cross. In the cross last July there was a brief rally following the cross but then the averages were flat in the three months up to November 14 offering little in the way of directional signs.
In the current situation BTC's most recent three-day candle closed at $3,936. This confirmed a triangle breakout and also validates a bearish to bullish trend change. The candle closed well above the $3,711 level confirming the outside reversal that had been created during the three days prior to February 15. However, Godbole thinks that highs above $4,200 may not come right away as short duration charts, the four hour and hourly chart are now bearish.
The long upper shadows connected to multiple candles on the four hour chart show bullish exhaustion near $4,000. The relative strength index (RSI) on the four hour chart is declining and in the hourly chart is below 50.0 a bearish signal as well.
The long upper shadows attached to multiple candles on the 4-hour chart signal bullish exhaustion near $4,000. BTC could decline to $3,800 before resuming its upward rally as suggested by the three day chart. However, the stacking order of the 50-hour MA above the 100-hour MA, above the 200-hour MA shows that any dip is likely to be short-lived.
Present situation
Bitcoin opened 24 hours ago at $3,929 according to CoinDesk data. Since then the low has been $3,870 with a high of $3,979. At 14:30 Central Standard Time BTC was trading at $3,899 just shy of $3,900. It is down just $30 dollars on the day or less than one percent. Perhaps, it will move sideways for a while before moving up or down. It has not yet tested $3,800 to the downside nor moved up above the $4,000 level. The present price of bitcoin can be found here.
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