Bulls made a surprising move but the follow through was less than satisfactory. Will Bitcoin price sustain above $4,000?
Bitcoin Price: Market Overview
At last, the bulls made a strong move but it is not as convincing as it could be. Regardless of what a weekly and monthly chart show, bullish analysts were clearly excited by this upside move and the press is hot with stories about trend reversals and a bullish start to 2019.
As the 4-hour chart shows, a break above the psychological resistance at $4,000 took place but a more convincing move would be to see follow through or consolidation that leads to a move above $4,240 over the next 48-hours.
Failure to break above this level should be a point of concern and in spite of all the bullish, ‘trend reversal’ talk and general investment optimism that comes with the arrival or a new year. Traders should remain realistic and recall that a bird’s eye view of the weekly and monthly chart for BTC/USD and nearly every other cryptocurrency shows the market still in the firm grasp of bears.
At the time of writing bitcoin price 00 appears to be finding support at $3,990, after visiting this region thrice. A sharp bear cross between the 5 and 10-MA can be clearly viewed and for the short-term Bitcoin needs to gain above $4,030 to maintain bullish momentum.
Traders would do well to keep to the basics and reference the 5, 10, 20 and 50 moving averages, RSI, Stoch, MACD, heck, even the Bollinger Band indicator to confirm any bullish setups before engaging with bitcoin, and of course, use a stop loss. Bitcoin is still more unpredictable than undetonated ordinance from WWII so swimming naked and over-exuberant trading is not advised.
To end things on a positive note (at least for bulls), the BTC/USD Shorts chart shows a considerable reduction in shorts so some of the overhead pressure has been removed for the next attempt Bitcoin makes at $4,100.
In the event that Bitcoin price is able to overtake $4,088 and $4,241, $4,415 would be the next crucial resistance level to tackle. As mentioned earlier, traders should remain cautious and curb their enthusiasm as any Bitcoin price under $6,500 is just a lower high, so there’s still plenty of work to do.
[Disclaimer: The views expressed in this article are not intended as investment advice. Market data is provided by Coinbase and Bitfinex. The charts for analysis are provided by TradingView.]
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Images courtesy of Shutterstock, Trading View. Market data sourced from Coinbase, Bitfinex