Bitcoin has crossed the crucial resistance mentioned in A Breakout Everybody’s Waiting For!, rising roughly 1.54% to trade at $235.75. The price appreciation has also led to overbought valuation for Bitcoin which might face stiff resistance from the next supply region at around $238. So, should you be buying Bitcoin now or not? Let’s find out in the technical analysis below!
Technical analysis of the above presented 240-minute BTC/USD price chart indicates that bulls have complete control over the situation and that Bitcoin is a pure buy-on-dips play.
Bitcoin Chart Structure – After breaching the downward sloping resistance on strong momentum, Bitcoin has marched higher to challenge the strong resistance zone of $238-240. Earlier in May, the cryptocurrency used this zone as a firm base but eventually cracked it as selling pressure rose. If the bulls can overcome the strong bearish pressure near the zone, price target of up to $245 open up.
Moving Average Convergence Divergence – The MACD indicator and the Signal Line portray a strong bullish mood with values of 1.7568 and 1.3724 respectively. The Histogram value is also significantly positive at 0.3844.
Momentum – The 10-4h Momentum reading of 3.3900 displays strong positive undertone.
Relative Strength Index – The RSI indicator reading represents a highly overbought situation with a value of 70.2676. The value must drop significantly below 70 to provide cheaper valuations.
Bitcoin’s strong upmove may continue until it touches $245, but since the cryptocurrency is overbought at the present level, market participants must wait for a minor correction before entering with long positions. $238-240 may act as a roadblock for the cryptocurrency, and hence, some consolidation cannot be ruled out. Buy if the price corrects to $230-232 for a primary target of $240 by maintaining a stop-loss below $230. Market participants are expected to keep track of the two-day Fed meeting commencing today to avoid any negative surprises.