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- Bitcoin has risen to $ 8,000 with the widely followed 200-day moving average that is beginning to rise in favor of bulls for the first time since May 2018.
- A bullish flag break in the hourly chart indicates a possible increase to $ 8,400. The break is supported by bullish readings on hourly and 4 hour charts.
- An increase to $ 8,400 may not be sustainable unless the movement is supported by an increase in trade volumes. The daily chart shows a bearish divergence in trading volumes.
- On the downside, $ 7,205 is the level to beat for sellers. A closing in UTC below would confirm a double spread and a risk transfer in favor of a shift to $ 6,000.
Bitcoin (BTC) returned above $ 8,000, a widely followed long – term indicator rising for the first time in more than a year.
The world's largest cryptocurrency in market value is currently trading at $ 8,020 on Bitstamp, an increase of more than $ 500 in the last 24 hours. Prices peaked at $ 8,032 earlier today.
The 7% rise from the previous day's low of $ 7,468 is remarkable, as the short-term technical tables went bearish earlier this week.
For example, the bitcoins came out of the range on Wednesday, reinforcing the plea for the withdrawal at $ 7,200 advanced by Monday's "Hangman" candle.
The rise to $ 8,000 could therefore embolden buyers, especially as the list of long-term technical indicators signaling a bull market continues to grow.
The latest is the 200-day moving average, a barometer largely followed by the long-term market trend.
The MA has lost its bearish bias in the first half of this month and is now starting to retrench, confirming the long-term bearish uptrend that has been signaled by several indicators in recent weeks.
MA bull of 200 days
As we saw above, the 200-day MA became bullish for the first time since May 2018. At the time of writing, the average is $ 4,500.
It should be noted that the moving average studies are based on historical data and tend to lag behind the price. The bullish turn of the MA over 200 days probably reflects the recent rise in prices.
As a result, short-term corrective withdrawals are not excluded. If prices fall below this range, the long-term bullish outlook will weaken.
For the next 24 hours, the BTC could reach $ 8,300, according to a bull break in the short-term technical tables.
Time tables and 4 hours
The BTC witnessed a breakout of the bullish flag on the hourly chart (top left) earlier in the day – a continuation pattern that often speeds up the previous bullish movement. The cryptocurrency can therefore reach $ 8,400 (target according to the measured height method).
The hourly chart also shows a break upstream of the declining channel (lower ups and downs).
The Relative Strength Index (RSI) is now skewed above 50, having crossed the declining trend line in favor of bulls earlier this week.
Meanwhile, on the 4-hour chart (top right), the Mean Moving Convergence divergence histogram (MACD) has moved into bullish territory above zero and the RSI has violated the trend line down in favor of bulls.
With the chances of winning in favor of bullish, BTC could challenge the recent high of $ 8,390 expected the next day or the next two days. A violation in this location would expose the next major resistance to $ 8,500 (June 2018 high).
Even then, buyers should be cautious as trading volumes have fallen over the past seven days, as shown in the chart below.
Daily chart
The increase of Bitcoin from the minimum of $ 6,178 announced last Friday is accompanied by the decline of the highest on the volume bars.
This bearish divergence casts doubt on the sustainability of recent gains and a further increase to $ 8,300, if any.
That said, the demand for a decline to USD 6,000 would only increase if the price closed under USD 7,206, confirming a double split, as we discussed yesterday.
Disclosure: The author does not hold any cryptocurrency assets at the time of writing.
Bitcoin Image via Shutterstock; charts by Trading View
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