Bitcoin price rose more than 2% to break out of the narrow trading range which started in early June. Surprised by a sudden rally, short-sellers booked their losses which further fueled the rally past the crucial resistance level of $227.
This advance has completely changed the scenario, which had been bearish for some time. Bitcoin now trades at $227.55, and dips can be used to accumulate the cryptocurrency from a short-term trading perspective.
Technically, Bitcoin has registered a positive breakout on the 240-minute BTC/USD price chart but sustenance is the key to more gains.
Bitcoin Chart Structure – The recent rally has catapulted the price above the resistance posed by the May-low of $227. If the bulls are able to hold their ground, the price may rise to challenge the previous strong support level of $231.
Fibonacci Retracements – Bitcoin is currently trading above the recently crossed 61.8% Fibonacci retracement level of $227.22. The cryptocurrency should aim for the 50% retracement of $231, subject to the condition that the rally does not fizzle out soon.
Momentum – The Momentum indicator has sharply risen since yesterday; the value has jumped from -2.0400 to 3.0500. This significant reversal should give enough confidence to the buyers to add more to their long positions on declines.
Moving Average Convergence Divergence – A similar positive turnaround has been witnessed in MACD as well; the MACD value has leapt from -0.7228 to 0.5046. The Histogram has also advanced from -0.1691 to 0.7858.
Relative Strength Index – After getting closer to the overbought territory, the RSI reading has eased down a notch to 59.3945.
Traders should consider cashing in on the positive momentum by buying Bitcoin on a decline to $225 and placing a stop-loss below $220. The upside target for this trade is at $235. Volatility is expected to remain relatively subdued, so profits may come quickly.