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Bull Reversal: Bitcoin Climbs Key Price Hurdle to Target $4K

Omkar Godbole
Dec 19, 2018 at 11:00 UTC
Updated Dec 19, 2018 at 11:08 UTC
markets

Bitcoin’s (BTC) price crossed key resistance yesterday, boosting the prospects of a stronger rally above $4,000.

The leading cryptocurrency by market value broke out of a bearish descending pattern and closed above key resistance at $3,633 yesterday. That came after picking up a strong bid on the anniversary of its 2017 all-time price high on Monday.

Tuesday’s close has also pushed up the probability of a bullish three-day close above $3,590 being confirmed on Thursday.

So, with the short-term picture looking bullish, the focus shifts to the next major resistance levels lined up at $4,000 (psychological hurdle) and $4,410 (Nov. 29 high).

BTC is currently trading at $3,750 on Bitstamp, having clocked a two-week high of $3,776 earlier today. The cryptocurrency has recovered 20 percent from the recent low of $3,122 but is still down 73 percent on a year-to-date basis.

Daily chart

BTC’s close above $3,633 on the daily chart bolstered the increasingly bullish technical setup, as represented by the positive divergence of the 14-day relative strength index (RSI) and the high-volume falling wedge breakout.

Further evidence that the bears have weakened is a bullish crossover between the 5- and 10-day exponential moving averages (EMAs).

Hourly chart

On the hourly chart, the bull flag breakout confirmed yesterday created room for a rally to $3,840 (pole height added to breakout price).

Both the rising trendline and the stacking order of the simple moving averages (SMAs) also favor an extension of the ongoing rally.

Monthly chart

The outlook as per the monthly chart would turn bullish if and when prices beat the former support-turned-resistance of the 21-month EMA, currently at $5,728.

View

  • Tuesday’s close above $3,633 confirmed a short-term bearish-to-bullish trend change.
  • BTC will likely test the psychological level of $4,000 in the next 48 hours, with the next target being resistance at $4,410 (Nov. 29 high).
  • A daily close below $3,633 would weaken the bullish scenario, but is looking unlikely in the short-term

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Bitcoin image via Shutterstock; charts by Trading View

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This article is intended as a news item to inform our readers of various events and developments that affect, or that might in the future affect, the value of the cryptocurrency described above. The information contained herein is not intended to provide, and it does not provide, sufficient information to form the basis for an investment decision, and you should not rely on this information for that purpose. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.