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article imageBitcoin briefly beats $5,300 again as key indicator turns bullish

By Ken Hanly     Apr 18, 2019 in Technology
After a few days of being stuck just above the $5,000 level, bitcoin appears to have begun its stalled recovery again as it managed to reach past the $5,300 level briefly so far today.
Godbole's CoinDesk analysis
Omkar Godpole has an analysis of the price movements of bitcoin (BTC) on Coindesk last updated at 11:27 UTC. Godpole notes that the moving average convergence (MACD) histogram that is used to determine trend changes and trend strength has moved above zero on the 15-day chart for the first time since February 2018. This is the latest addition to a list of indicators that are pointing to a longer-run bullish reversal for BTC.
The MACD is a lagging indicator. It tends to lag price and some would argue has limited predictive ability. Many might claim that the bullish turn is the result of bitcoin's recent price rally rather than MACD signal. However, if we take into account historical data it shows that the last positive MACD crossover in July 2016 was followed by a two and a half year bull market. This perhaps lends credence to the signal as positive.
Chart analysis
On the two-week chart the MACD histogram is printing positive for the first time in 14 months after having charted a bullish divergence or a higher low pattern back last November. The MACD created a similar pattern of bullish divergence 10 months before the long term bearish-to-bullish trend change , as represented by the falling channel breakout seen in October 2015.
The indicator moved above zero a full four months before the bullish breakout and 12 months before the bitcoin mining reward was halved, reducing the supply of bitcoins. The halving took place in July 2016. The MACD's latest bullish turn has already been followed by a falling channel breakout. It is now 12 months before bitcoin's third reward halving scheduled for May of 2020. If history repeats itself than bitcoin prices may continue to create bullish higher highs and lower lows before the halving event as seen before.
However, in the shorter run, BTC might have problems finding acceptance over the 21-month exponential moving average that currently sits at $5,239. In the next 24 hours bitcoin could suffer a drop to $5,000 if the key support level at $5,200 is breached. This would validate the short term bearish indicators on short duration charts.
The hourly chart shows some negative signs showing lower highs and also the MACD turned negative. The price of BTC is holding above the $5,190 level which is acting as a strong support. If this level is breached the bearish indicators would gain credence resulting in an even deeper drop.
If BTC finds acceptance below the $5,190 level this brings up the possibility of creating a bearish head-and-shoulders pattern on the 4-hour chart and lead to a drop to the neckline support which is at present $5,000. If the BTC price breaks through the $5,300 level the bearish case would be weakened and there could be a retest of the $5,466 recent high.
As Godbole posted his article bitcoin was trading at $5,241 on Bitstamp, a gain of one percent in 24 hours.
Present situation
24 hours ago bitcoin was trading at $5,225. It has hit a high since of $5,316 with a low of just $5,216. At 19:30 Central Daylight Time it had fallen back to $5,266 or $41 dollars above where it had opened. While breaking through the $5,300 level mentioned in Godbole's analysis but failed to remain there and has not yet tested the former high. Bitcoin shows no sign of going below the $5,190 level mentioned by Godbole. The present price of bitcoin can be found here.
The majority of the top twenty altcoins are up in price today.
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