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Bitcoin (BTC/USD) - Strong Bullish Action Puts the $5000 area in Sight

Bitcoin (BTC/USD) has been in consolidation mode after falling sharply to end 2018. After failing to reach back down to the lows from Dec. 2018, price action started to percolate. Price is now pushing sharply agianst the $4000 mark with upside towards the $4400-$4500 area, which represents the next resistance.

BTC/USD Daily Chart

Bullish Breakout:

  • Looking at the daily chart, we can see that price has been making lower highs within the consolidation structure.

  • However, price action is above to challenge the previous highs around $4000.

  • A break above opens up the $4400-$4500 area,

  • A stronger “reversion” towards the 200-day simple moving average (SMA) means upside risk to $5000 as well.

  • It should be noted that even a pullback to $5000 would be within the larger bearish structure that has been developing since the start of 2018.

  • Given the context of an overall bearish market in the past year, I would respect any kind of bearish divergence signal between price and the RSI.

  • In other words, if price does reach $5000 and the RSI has made a bearish divergence, I would anticipate a sell-off at least back towards $4000.

  • At the moment, another test of $3600 as support could improve the bullish confidence and the prospect of pushing first to $4425 pivot area before possibly the $5000 mark.

  • A dip below $3600 on the other hand, would shelve the bullish outlook, and would put pressure back on the $3000 area.

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