There is great news for bitcoin bulls. As IBM proves it’s serious about the bitcoin blockchain, the market is moving higher and improving the case for a breakout that may very well open the doors to huge upsides.
In this article, we will discuss the latest technical indications using the daily BTC-USD price chart taken from TradingView.com. The bitcoin exchange used is BITSTAMP.
As can be seen from the chart above, bitcoin had been trading in a contracting channel since Nov 2015. In this channel, the cryptocurrency has recorded 4 price reversals, which is generally an appropriate number before a breakout occurs. And there is strong technical backing which suggests that the breakout will please the bulls.
From the chart, it can be observed that bitcoin recently retraced after hitting $418 in its earlier attempt. Now at the same level, bitcoin faces a cluster of resistances beyond which lies strong gains for the cryptocurrency.
The downward sloping resistance line, drawn using the peak values since November puts the pressure point at $428 while the near-term resistance is the previous high of $418. The next $10 are crucial for bitcoin.
Technical Indicators Are Supportive
I have used three technical indicators – MACD, MFI and RSI – and all point towards a strong bullish case. MACD has entered the positive territory and Signal Line is fast erasing losses, thereby leading to consistent gains for the Histogram.
MFI shows a positive correlation with the upbeat mood with its latest 14-day value of 73.4913. However, it must be noted that readings above 80 suggest overbought conditions.
The latest 14-day RSI value of 62.9203 also concurs the optimism surrounding bitcoin.
From the looks of it, bitcoin looks poised to scale past the resistance levels. Traders can initiate long positions now and on declines until the support lent by the upward sloping trendline is not dented. The target on the upside is $480-$500.