Points of view
- The 4-hour chart reports a bullish break. As a result, bitcoin could challenge the key resistance to $ 10,956 in the coming days.
- The daily chart indicators also indicate the scope for a new test of recent highs.
- A UTC close above $ 10,956 (August 20 high) would activate twin bullish signals and open the door for $ 12,000.
- A high volume break below Wednesday’s low of $ 9,855 would revive the bearish view, although that seems unlikely.
Bitcoin has regained its balance in the last 48 hours and could review recent highs in the coming days, the charts suggest.
The main cryptocurrency by market capitalization picked up a minimum bid below $ 9,900 on Wednesday and rose more than $ 10,100 yesterday, confirming a falling wedge break in the 4-hour chart.
The falling wedge pattern, which includes converging trend lines that connect lower highs and lows, was created during the pullback from last Friday’s high near $ 10,956 (bearish bearish high of August 20) to Wednesday’s low of $ 9,855.
However, the low-volume correction ended with a bullish breakout on Thursday and the cryptocurrency is now looking north, and a new test of the bearish bearish high of $ 10,956 could be in perspective in the coming days.
At the time of writing, BTC is changing hands to $ 10,320 in Bitstamp, having reached a maximum of $ 10,458 earlier today.
4 hour chart
The falling wedge break is supported by a reading greater than 50 in the relative strength index (RSI). The indicator has also violated the downward trend line.
In addition, the convergence histogram of moving average convergence (MACD) is printing bars above the zero line, which indicates bullish conditions. Meanwhile, Chaikin’s money flow (CMF), which takes into account both prices and trading volumes, also remains above zero, a sign of strengthening the buying pressure.
As a result, there are likely to be more gains at levels above $ 10,900.
BTC created a long-tailed candle on Wednesday, indicating the seller’s depletion below $ 10,000. Similar daily candles (marked with arrows) have consistently marked temporary funds and driven lower price increases in the last 10 weeks.
Therefore, there is a strong argument for a bearish minimum increase of $ 10,956.
BTC also appears to be forming the right shoulder of an inverse head and shoulder pattern with a neckline resistance near $ 10,956.
Then, a UTC close above that level would activate twin bullish signals: override of bearish highs and an inverse head and shoulder break.
The latter would create the room increase to $ 12,590 (target according to the measured movement method).
On the negative side, $ 9,855 (Wednesday’s minimum) is the level to overcome for sellers, although it seems unlikely at the time of publication.
Disclosure: the author has no cryptocurrency assets at the time of writing.
Bitcoin image via Shutterstock; charts by Trading View