If we were to look just at the price, bitcoin is trading on a flat-to-negative basis at $438.90. However, one glance at the underlying technical indications corroborates our view that a rebound may be in the offing.
In the past 24 hours, bitcoin has witnessed significant improvement in the technical readings and taken support from our prescribed level, all of which has been discussed below. We have analyzed a 4-h BTC-USD price chart from the BITSTAMP exchange.
100 4-h SMA continues to provide cushion – Bitcoin touched a low of $433 yesterday, a level which we specifically mentioned as the key support for the cryptocurrency. The cryptocurrency should now tackle the immediate resistance from the 20 4-h SMA of $442.Momentum – We also pointed out earlier that the Momentum has hit a bottom and that its value may cross 0 soon. The current value of Momentum indicator is 6.0700; a drastic improvement over its previous value of -12.7900.Money Flow Index – The MFI has also seen a strong appreciation in its value to 46.3961.Relative Strength Index – The latest RSI reading of 43.8706 does not lend much confidence to the buyers but do watch out for a sharp jump.
Conclusion
The bulls seem to be getting their mojo back. Above the mentioned resistance of $442, bitcoin should head for the current upper range of the BB at $458. The big hurdle for the bulls remains the “triple top” resistance of $467, beyond which the price may shoot to $500.
Market participants should build long positions now and on dips, by placing a tight stop-loss (closing basis) below $432 for an initial target of $455-458. Expect a good price move in the next 36 hours. Volatility will remain on the lower end.
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