Bitcoin price broke out of a bottom consolidation overnight, jumping 11%, reclaiming the $8k handle ahead of the weekly close. We take a look at the price action as we head towards the weekly close.
Bitcoin Price: 4-Hour Chart
The 4-hour chart shows that bitcoin price 00 broke from $7,247 to $7,980 in one hourly candle, smashing through and past the $7,878 level from which the 20% decline occurred at Bitstamp.
This is particularly encouraging, on the basis that one may have expected to find short interest at this level.
Furthermore, this area also acted as support on the first time and resulted in a further push to find highs over $8,100, which implies that there is bullish momentum in this move.
The MACD has crossed bullish with its signal line and is now trending higher above zero, with higher highs on the histogram. The move was also supported by strong volume.
BTC/USD Weekly Chart
Taking an early look at the weekly chart, we can see that the resistance currently being faced, dates back to July of 2018. Interestingly, we can see that the volume candle for this week is the highest seen in 2019 with half a day of trade remaining.
The volume node at the price range of $6,150 – $7,000 is now acting as support along with the 100 MA and that above $8,453 and there is relatively little price volume history, which may mean that there is surprisingly little resistance above.
The MACD is in confluence with the other key lower timeframes and has now been crossed bullish since the first week of February 2019. All of these factors point to bitcoin being bullish, although there is still some time remaining on the weekly candle and last week’s sell-off acts as a stark reminder that things can change very quickly in this market.
Weekend Pain for Futures Traders
Bitcoin’s push through the weekend has meant that assuming Bitcoin can maintain its prices through today above $7180, there will be another CME gap up in price caused by weekend trading, which will cause more pain for those shorting Bitcoin.
These gaps are typically backfilled eventually, meaning that the $7k level may be a key level in the coming weeks if and when Bitcoin eventually corrects. The weekend trading for futures traders will be becoming somewhat of a headache for the traders who are unable to act in instances of weekend volatility such as those seen today.
As BTC/USD heads into the close, there are many indicators implying that there are still legs in the bullish move and that bitcoin could press higher towards the $9,500 where there is a key Fibonacci retracement level of 38.2%.
Breaking the $8,500 level will be extremely significant and is seen by many as being key to reversing the bear market.
Despite all the bullish momentum, traders will remember several painful double tops after pullbacks around these prices in 2018 and will need to remain vigilant.
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The views and opinions of the writer should not be misconstrued as financial advice. For disclosure, the writer holds Bitcoin at the time of writing.
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