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Bitcoin (BTC) is currently trading at around $4,900.The price has broken the resistance levels at $4,047 and $4,311. The price level at $4,322 is now acting as support and the new resistance is at around $5,720. It can be seen that the upward rally started after the formation of a Morning Star pattern, which is a strong bullish indicator.
According to Dow Theory, the stock has moved from the panic phase to the accumulation phase and now finally to the public participation phase. This phase tends not only to be a long lasting, but also the one with potentially the largest price movements.
It’s also the phase in which most technical and trend traders start to take long positions, as the new upward primary trend has confirmed itself – a sign these participants have waited for the trend line should act as support here.
The popular digital coin was earlier trading between the channels of Bollinger bands, but today it has broken the Bollinger bands’ upper limit, indicating an upward movement which is supported by positive momentum. This combination of Bollinger bands and momentum indicates strong upwards movement.
Taking 9 period moving averages (blue) with 21 period moving averages (red), a bullish crossover is seen and the price is trading above the 9 period moving average, indicating an upward rally.
Looking at the charts, it can e seen that BTC has broken the resistance at $4,047 and $4,311. The price level $4,322 is now acting as support, with new resistance at $5,720. All the other indicators are pointing at an upward rally, and long position can be taken. But we might expect a little correction in the coming days which can be used for taking long position.
For a midterm investment, the $5,720 target looks good. Swing trading should be avoided at this level, as the candle formed is big which will make it difficult to decide on a stop-loss. For swing trading it is suggested to wait for the price to settle and after the price is again between the Bollinger bands the target for swing trading can be calculated. Overall, Bitcoin’s outlook is definitely positive.