Bitcoin (BTC) is in a short term uptrend, after getting a solid candle close last night. Currently hitting a local resistance, we could see the leading crypto have a clean run up another thousand dollars with another push.
We start on the 4-hour chart, and see that a good retest of local support has translated into a LTF uptrend. This uptrend is running into local resistance at $6,800, and it’s make-or-break time.
We can see the RSI has plenty more room to run before being overbought. The histogram is plowing up nicely, although we don’t see an accelerating expansion at this time.
On the daily chart, we see what the consequence of a breakout will likely be. A break here would take Bitcoin out of the current regional resistance zone it is carving through. The next major resistance zone surrounds $7,700, which would be the next stop and likely sell zone.
We see two indications in support of uptrend here. One is the 8 EMA, which Bitcoin managed to close above last night after days of very choppy action. The second is a breakout from the daily RSI trend, a retest of that trend, and an upward trajectory. This is promising, and suggests a break of the local top.
Finally, on the 3-day chart, we see that the next resistance zone is nearly confluent with the ‘golden pocket’ Fibonacci level of .618-65. If Bitcoin does break above the local level, there is a strong chance that the uptrend will be stopped somewhere around here.
Ultimately, we shouldn’t be expecting too much upside out of Bitcoin right now. We are still well within the expectation of a relief rally from the panic selling that occurred a couple of weeks ago, amid the COVID-19 impacts to the global economy.
Having said that, nobody knows how crypto will perform in the – what now seems inevitable – coming economic recession. We could well see it ‘decouple’ from commodities, equities, and fiat values.
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