The digital currency Bitcoin has jumped sharply from the lows of $250 registered on March 18 to $268.52 today. In my previous Bitcoin analysis Troubled Waters, I mentioned a possibility of the cryptocurrency surging towards $280 if it broke above $265. The resistance level has been taken out and retested thrice to stamp it as a support level, at least for the short term.
Although I still believe that Bitcoin will hit $230 in the medium term, a rise may be witnessed in the near term, which could be used as an opportunity to exit the long positions or create fresh shorts. An analysis of the 240-minute BTC/USD price chart has been presented here.
- Chart Structure – As can be seen, the digital currency had been trading in a contracting channel since hitting $250. However, the bulls managed to post strong gains at the point of intersection of the contracting channel and are currently holding the value above the Support Level (marked in the chart).
- Momentum – The Momentum indicator has progressed aggressively in the positive region after struggling to cross the resistance level. The latest reading of 6.7800 implies that the cryptocurrency may continue with its rebound.
- Relative Strength Index – In accordance with the Momentum indicator, the RSI value has also stomped on the resistance level to move higher. The underlying mood has turned optimistic as the RSI registers a value of 55.5743.
- Moving Average Convergence Divergence – The MACD and the Signal Line continue with their upward march with the Histogram value inspiring confidence at 2.0158. However, the latest MACD value is -1.0259 and Signal Line value is -3.0416. A failure on the part of bulls to push these values north of 0 may prove negative for the digital currency.
Market participants must remember that Bitcoin is a highly volatile currency and hence, positions must be made keeping the risk-appetite in mind.