A week after the game-changing breakout of Bitcoin (BTC) from the critical $4,200 price level, and subsequent strong waves and trending upward, the leading cryptocurrency is ranging sideways between its new breakout point of $5,360, and the 55-hour exponential moving average (EMA).
BTC has trended upward since 4 April, after its only significant retrace of about 10% since the breakout. This trending has been supported by the important 55 EMA, below in pink, which BTC has only briefly pierced at any time during the trend.
It seems clear now that the short term trend has faded, and Bitcoin is squeezing tighter between the previous uptrend, and the local top. The market, chartists, and analysts now wait for BTC to pick a new direction.
Should Bitcoin correct down and take a well deserved breather, there are several bands of support to fall back on. Ultimately, the 200 day moving average (purple) will hopefully be the hard wall of any BTC correction - and staying anywhere above it would maintain the overall bullish momentum of the leading crypto in the medium term.
If we look at the 4 hour RSI chart specifically, we can see a bearish, downtrending strength indicator making both lower highs and lower lows. This may suggest a correction, after breaking the 55 EMA support. On the other hand, BTC’s overall pattern is cearly an ascending triangle - a bullish pattern. With no short term trend to fall back on, it really is rather futile to try and guess which way the break will be; now is the time for breakout trading.
Long futures contracts on the Bitfinex exchange outnumber the shorts by a fair margin: about 26,000 longs to 18,400 shorts at time of writing. On the long term, short contracts on the exchange are resting on historic support, and look poised to break that support into almost 2017 levels.
(The views and opinions expressed here do not reflect that of CryptoGlobe.com and do not constitute financial advice. Always do your own research.)