Bitcoin is at critical level that will dictate its future price movement
Bitcoin had some solid gains starting overnight or in the overseas markets and lasted up until the open in New York before hitting resistance and giving back only a small fraction of its gains. Currently as of 2 PM EST, Bitcoin is trading at around $44,150 on the spot market and $44,215 in CME futures.
During the weekend bitcoin briefly dipped below the 50-day moving average. This dip however was on an intra-day basis and only clearly visible on higher timeframes such as a four-hour chart.
For that reason, we are viewing the 50-day M.A. as remaining tentative support. I say tentative because it is not as strong as the resistance level that Bitcoin has failed to break after a total of four attempts last week. That makes today’s attempt the first of this week’s and whether or not BTC can break above this resistance will determine its direction from this point.
The resistance I am referring to makes up the 61.8% retracement from the lows of June at $28,885 to the ATH hit in November at approximately $69,170. The 61.8% Fibonacci retracement from this rally comes in at $44,275.
Technically, Bitcoin seems poised to break through this resistance area this week. The RSI is currently trending upward and at its current level is just above 60, meaning it has some room to grow and trend even higher. The retracement of the rally from the recent low at $33,000 to the high at $45,000 was a very shallow one. In that correction that went on until Monday Bitcoin gave back only 5% of value, this after gaining over 20% from the recent lows. The fact that the retracement happened to conclude at the same point as the 50-day moving average strengthens the bullish outlook for the number one crypto by market capitalization.
If Bitcoin does indeed breakthrough the current level of resistance, we could expect to see pricing reach as high as $53,000 before hitting the next level of resistance. If Bitcoin goes the other way and breaks below the 50-day M.A. currently at $41,800 then it could fall to as low as $37,500 before finding the next level of support.
