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Bitcoin (BTC) is currently trading around $8,700. Looking at the chart, we see the formation of a shooting star pattern; it is a trend reversal pattern, indicating a small correction.
The digital coin surpassed the minor resistance of $8,667, and now faces a major resistance at $9,405; support is at $8,286. It is suggested wait for the price to settle down a bit above the minor resistance before taking long positions.
According to Dow Theory, the BTC price is in the participation phase. During this phase, negative sentiment starts to dissipate. As the good news starts to permeate the market, more and more investors move back in, sending the price higher.
This phase tends not only to be the long lasting, but also the one with the largest price movement, as we previously discussed. It is also the phase in which most technical and trend traders start to take long positions.
The price is moving between the channels with the middle average line acting as support. The channel is expanding, indicating increased volatility but the momentum is getting flat, indicating indecision. This might cause minor correction in the price.
When taking 9 period moving averages (blue) with 21 period moving averages (red), there is an indication of a positive trend with a bullish crossover. The moving average is acting as support with price moving above the moving average; this is a positive sign that points to an upward movement.
Bitcoin (BTC) is currently trading at approximately $8,700. The largest virtual currency jumped above the minor resistance of $8,667, and its next hurdle is the major resistance of $9,405; support is at $8,286.
It is suggested not to take long position at the current price as there is a formation of a shooting star pattern which indicates trend reversal; wait for the price to establish itself above the minor resistance before taking long positions. The above price levels can be used for swing trading. The overall trend is bullish with midterm target at $9,934.