Bitcoin has been consolidating since the end of last week after it tagged the 236 handle. BTCUSD rebounded from 236 to about the 255-256 area before stalling. Over the weekend and at the start of the week, we saw the cryptocurrency slide back towards that 236 low, but respecting it as support again. The 1H chart shows the strong rebound from the support area, which sets up a potential double bottom.
In the 1H chart we can see that before a double bottom is complete, price action has some slight bearish bias. Indeed before this possible double bottom, price was retreating from around 300.
Now, if price pushes above 250, we should have an early sign that bulls are indeed taking over in at least the near-term time-frame, within the global session. Above 250, btcusd would break the coiling or triangle resistance seen in the 1H chart, as well as the 200-hour SMA. This would first open up the 255-256 high. Then, if price can start holding above the 245-246 area, the bullish outlook would strengthen. Then above 256, bitcoin could open up the 300 handle again.
In the 4H chart, we can see that before opening up the 300-handle, there is going to be another test above the double bottom. Around 270, there are 3 key resistance factors:
1) The 200-period SMA in the 4H chart.
2) A previous resistance pivot.
3) A falling trendline.
Therefore, a break above 270 should strengthen the bullish outlook towards the 300-handle, around the March-highs. Now, if price holds under 256 and is able to come back below 245, the bearish outlook should still be in play. Even if there is a double bottom completed, a retreat back below 245 could revive the prevailing bearish outlook. In this bearish continuation scenario, a break below 236 would open up a support zone in the 200-210 area. Below that the 166.45 low on the year would be in sight.
Previous Post by Author on Bitcoin: Bitcoin Price Technical Analysis for 31/3/2015 – Double Bottom