Bitcoin had a disappointing price action over the weekend, erasing most of the gains in quick succession. The cryptocurrency has been steadily reaching higher highs while retesting the support levels and has managed to edge and sustain above the strong resistance zone.
Owing to diminished gains, Bitcoin reports a price advance from $236.10 (since Friday’s observation) to the current $238.50.
From a trading perspective, Bitcoin is at a crucial price level.
Bitcoin Chart Structure – Bitcoin successfully crossed the $236-238 hurdle and went on to hit a high of $241.64. However, the glory was short-lived as profit booking hit the virtual currency at higher levels and dragged the value down to the support zone (marked as yellow in the chart). Bullish chances rest on the support zone being respected.
Fibonacci Retracements – After surpassing the 38.2% Fibonacci retracement level, bulls aimed for the 23.6% retracement of $239.29. But, Bitcoin struggled to hold above this level and is presently beneath it.
Moving Average Convergence Divergence – As the rally fizzled out, so did the underlying momentum. The MACD indicator has crossed the Signal Line on the downside, giving the Histogram a negative value of 0.1115. The MACD and the Signal Line are in the positive territory with values of 0.9243 and 1.0358 respectively.
Relative Strength Index – The RSI reading has eased from near-overbought levels of 65 to a more-neutral level of 52.7123. A dip below 50 would suggest weakening optimism.
The virtual currency clearly maintains its higher top, higher bottom price structure. The valuation also provides an extremely low-risk, high-reward long opportunity; traders can create long positions in the counter for a target of $244 by maintaining a stop-loss just below $236 (closing basis). Volatility is expected to remain subdued in the coming sessions as well. Market participants are advised to keep risk preferences in mind while creating trading positions.