Bitcoin managed to break above the $5,500 level in yesterday’s session, showing continued signs of strength in the counter. Favourable technicals are also helping the Bitcoin prices to extend gains and also offering support to the overall market.
Analysing both the daily and weekly timeframe, the chart pattern shows the reversal of the year-long bearish trend and the market is likely to continue higher.
On daily time-frame, the BTC/USD is witnessing a golden cross, which means a shorter duration moving average slope in penetrating the longer duration moving average slope from below. This is a very positive development for the market. The similar pattern was last witnessed in September 2016, when BTC was trading at $100 level and has seen prices rallying up to the $20,000, before the reversal in trend happened.
Going by the support resistance line, the $5,800 level above should offer a bit of resistance and it extends up to the $6,200 level. If BTC prices fall below, then the $5,000 level should offer strong support to the market.
In the weekly timeframe, the 50 Day SMA is offering strong resistance to the counter, but MACD is trying to break higher, indicating a gain in momentum from lower levels. MACD divergence shows the momentum in price relative to prior price swings.
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