Bitcoin Price Closing in on Resistance at $4,000 — Will The Rally Hold?
03/01/2019 - huy
The bitcoin price on Thursday showed minor upside movements as it maintained the gains made during yesterday’s session.
Bitcoin Price Technical Analysis
The BTC/USD exchange rate posted as much as 1.5 percent in gains during the first half of the trading session. The pair notably eyed a rally towards $4,000 but corrected ahead of establishing the said upside target, eventually falling to $3,843, its value at the time of writing.
BITCOIN 1D CHART | SOURCE: COINBASE, TRADINGVIEW.COM
The price action also confirmed a firm price action similar to what market had encountered during the November 24-December 3 trading session. The higher low of November 27 at $3,567 is now serving as support to the interim consolidation range, while $4,000 continues to be a psychological resistance. There are notably enough opportunities for day traders provide by a decent gap between the two parameters. However, in the long-term, the bitcoin market is still inside a giant descending channel, now nearing the channel line for a potential breakdown/pullback scenario.
The bitcoin price is also noticing a strong resistance sentiment near its 50-period moving average depicted in sky blue. During the consolidation period above $6,000, the same moving average had capped every upside attempt. As of now, the market has seen the 50-period rejecting one rally attempt, and bitcoin is again closing in towards it to pursue a potential interim breakout action towards the main trendline above.
The RSI on daily charts continues to face resistance inside 55-58 area, indicating the presence of strong bearish sentiment near these levels. The momentum indicator hasn’t entered its overbought zone since July 24, 2018.
The early US session reports are indicating a stronger dollar for the rest of the day on weak Chinese manufacturing data. The greenback is posing itself as a safe haven, and a high yield would likely boost its demand in the market. Bitcoin has a little opportunity in the macroeconomic circle as long as fiats like the dollar and yen are fulfilling the demand.
BITCOIN 1H CHART | SOURCE: COINBASE, TRADINGVIEW.COM
For the rest of the US trading session, we are hoping that bitcoin will continue to consolidate between the trading range defined by $3,885 as resistance and $3,567 as support. The decent gap between the said parameters initially allows us to apply our intrarange strategy, i.e., entering a long towards resistance on a bounce from support and a short towards support on a pullback from resistance. A risk management strategy, meanwhile, should have us maintain a stop loss order just 1-pip in the opposite direction of our order.
In case the bitcoin price breaks the resistance level, we will switch to our breakout strategy and enter a long position towards $4,000. A stop loss order maintained just 1-pip below the entry point will minimize our losses should the upside bias get rejected once again. Similarly, a break below support would have us open a short position towards $3,437, our downside target, while maintaining a stop loss order just 1-pip above the entry point.
According to CCN
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