Double Break Out of Bitcoin Price Upon ‘Golden Cross’!

At time of writing (April 23, UTC), Bitcoin (BTC) has given the market its second huge price surge of the month, after breaking and holding above the critical resistance zone around $5,350. Resistance has been blown away, and Bitcoin looks set to begin laying a new market structure in the coming days.

As CryptoGlobe recently covered, Bitcoin had lately been consolidating within two triangle patterns. At this point, it has definitely broken out of both, and thus broken market structure.

bitcoin price 23 april(source: TradingView.com)

A test breakout above the key level gave way to a full breakout, after forming a clear bull pennant above $5,350. Bitcoin saw as much as 5% worth of gains during the event.

bitcoin price 23 april(source: TradingView.com)

Positive price action for BTC looks set to continue at least for the next few hours, as Europe and then the Americas wake up to the good news. The hourly RSI, a reliable indicator at this timeframe, is showing an increase in strength between the first and second pushes - a good sign for the very short time.

bitcoin price 23 april(source: TradingView.com)

Some key price targets to look out for are to be found, generally, within Bitcoin’s price history. We can expect traders to begin taking short term profits starting at about $5,800 and up to $6,200. Many expect a sharp rejection around $6,000, and indeed such a medium term rejection seems more than likely given Bitcoin’s very long price history around this region.

bitcoin price 23 april(source: TradingView.com)

This second April pump has coincided precisely as a classic “Golden Cross” has occurred. This is normally classified as when the 200 and 50 day moving averages cross, with the 50 crossing above the 200; and it is typically a bullish sign. However ...

Chink in the Armor -- History of Bitcoin’s Golden Cross

Amid the hopeful signs, we should still bear in mind the possibility of a bear trap. For an example of when this has actually happened to Bitcoin, we can look at the previous bear market of 2014-15.

At that time, in the depths of 2015, the $300 price marked the top of the bottom. This resistance level needed to be retaken and flipped into support.

A strong season of upward price action, from June to July of 2015, saw the 50 and 200 day moving averages cross in a classic golden cross. It occured the day after a market rally and breakout above $300, which may remind us of today’s breakout above $5,350 or thereabouts - also attended by a golden cross.

But in 2015, the day after the breakout and cross, price re-collapsed back down below the breakout level into a false breakout. In the 44 days from that false breakout, Bitcoin retested the zone near its lows, and the averages re-crossed back down - in what proved to be a false death cross. It was false because, only about a month later, another, final golden cross saw Bitcoin’s price reverse into a years-long bull run.

bitcoin price 23 april(source: TradingView.com)

Admittedly, these two scenarios looks different. 2015’s false breakout-plus-golden cross came after a long period of cautious ranging, without the kind of monster breakout that Bitcoin saw on April 2 to precede it.

Today’s Bitcoin price action certainly makes the above scenario seem less likely.

(The views and opinions expressed here do not reflect that of CryptoGlobe.com and do not constitute financial advice. Always do your own research.)