CoinDesk analysis
Omkar Godbole has his usual daily analysis of the price movement of Bitcoin on CoinDesk. He notes that BTC is having a short-term reversal. Yesterday it closed at $4,257 UTC, the largest gain for the coin in the last seven months. The increase was 11.43 percent over 24 hours, the highest jump since April 12 this year according to CoinMarketCap.
Back then, BTC was trading considerably higher than now, 38 percent higher at above $6,900. The gain then followed an earlier 45 percent drop and a period of consolidation. However, that big move by the bulls also marked the beginning of a rally that saw the price of BTC move to close to $10,000 by early May.
Yesterday’s gain also came after a 44 percent drop to 14-month lows ending at below $3,400. Godbole points out that positive signs are building up on short duration technical charts which show that BTC could be in for a short-term bullish reversal that could be similar to the one witnessed last April.
Chart analysis
The daily chart shows that yesterday BTC created a large bullish candle which confirms the bearish exhaustion signal shown by three previous long-tailed candles. With the move higher, the 14-day relative strength index (RSI) has moved back into undersold territory above the 30 level validating a bullish divergence. It could be that the April move may repeat itself and the price of BTC move closer to $5,000.
The bullish case is even stronger than it was in April. The RSI hit record lows during the recent drop indicating extreme oversold conditions below 30 but in April the RSI was above 30 before the rally.
The 4-hour chart shows BTC is testing the falling channel resistance located at $4,320 at press time, 11:00 Central Standard Time, with a move above $4,120 earlier today. The 15-minute chart has a bull flag breakout which signals that the falling channel could be breached soon. If confirmed, this would help strengthen the already bullish setup.
Godbole’s prediction
Based on his analysis, Godbole’s outlook is: “BTC’s 11 percent price gain has likely turned the tables in favor of the bulls. A falling channel breakout on the 4-hour chart, if confirmed, would open the doors for a test of psychological resistance at $5,000. The short-term bullish case would weaken if a convincing break above the 10-day exponential moving average (EMA), currently at $4,293, remains elusive for the next 48 hours.”
Present situation
At 20:00 Central Standard TIme, BTC was at $4,208 according to CoinDesk data. This is well over a two percent gain in the last 24 hours. The price opened at $4,123 and rose to a high of $4,400. The price needs to move back up to break through the $4,293 resistance level convincingly but this could happen in the next few hours. While the movement appears to be still bullish there is no big move to the upside. It is possible that the price is consolidating prior to another downside move. Bitcoin’s price has sometimes gone counter to technical signs. The present price of Bitcoin can be found here.
