Bitcoin bulls have staged a much-needed, strong comeback and bears are scampering for cover. Bitcoin is now trading at $292.71, comfortably above the previous resistance zone of $280-285. Investors can expect to see more gains in the cryptocurrency, which looks poised to cross $300 soon, and register a positive weekly close.
For long, the Bitcoin market had been consolidating sideways while the underlying mood remained positive. Various momentum and strength indicators, including MACD and RSI, had been indicating bullish bias in the digital currency. Several technical factors also lend credence to this surge, and some of them have been discussed below.
The 240-minute BTC/USD chart paints a favorable picture for the investors and long traders.
- The price rise, unlike in the past, has been followed by a jump in the volume. Rising prices with increasing volume indicates strong bullish momentum and minimizes the risk of a fake blowout.
- As can also be seen from the chart, the price has retested the previous resistance level of $285 thrice and then marched on, stamping it as a strong support level for its next major upmove.
- The Moving Average Convergence Divergence (MACD) reading is fairly positive at 4.7920 and the histogram value continues its upward trend; now at 1.8052.
- The Momentum indicator, as the name suggests, is a measure of the momentum in the cryptocurrency. The value of 18.55 is enough to keep away the shorts for a while.
- As the Relative Strength Index (RSI) is directional, therefore, the value of 77.74 indicates overbought level. Hence, it may get tough for the bulls to repeat the dramatic rise in the coming sessions.
Even with strong momentum favoring the currency, investors who are sitting on huge profits may consider exiting partially. Bitcoin is known to be a highly volatile currency and market participants must not let the exuberance cloud their wise judgment.