As we get into the 5/21 US session, bitcoin is threatening a key resistance area. When we look at the 4H chart below, we can see that btcusd is currently testing a falling channel resistance. This channel has been forming since a couple of weekends ago after price found resistance at 249. This week, after a test of 229, it looks like bitcoin might be setting up for a bullish outlook.
Bitcoin (BTCUSD) 4H Chart 5/21
(click to enlarge)
In the 4H chart we can also see that just under 240 is a common support/resistance area. A break above 240 would ensure a break above this support/resistance area, the falling channel, and he 200-, 100-, and 50-period simple moving averages (SMAs). If the RSI also pushes above 40, a break above 240 should open up a bullish continuation outlook. Note also, that the hold above 230 for the most part keeps btcusd above the middle of its late-April to May price range, another indication that bitcoin is anchoring upwards.
The bullish outlook developing in the 4H chart will be going against a medium-term bearish mode seen in the daily chart.
Bitcoin (BTCUSD) Daily Chart 5/21
(click to enlarge)
We can say that the trend has flattened, but it definitely has not turned bullish. In fact because price is still mostly under the 200- 100-, and 50-day SMA while the RSI is holding below 60, the technical picture would be bearish-neutral.
But, if we do break above 240, pressure will be on 249-250. A break above 250 would open up the 280 area, where the 200-day SMA resides. The most aggressive bullish outlook for now should be limited to the 300-315 resistance area.
Now, if instead of breaking above 240, price falls below the May-low of 226, then we are likely still in a bear’s market with pressure at least to the 214 support, and possibly the 200 psychological level. Below 200, the 166 low on the year would come into play.
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