Bitcoin Threatening a Short-term Channel Resistance

0
29
Bitcoin Threatening a Short-term Channel Resistance

As we get into the 5/21 US session, bitcoin is threatening a key resistance area. When we look at the 4H chart below, we can see that btcusd is currently testing a falling channel resistance. This channel has been forming since a couple of weekends ago after price found resistance at 249. This week, after a test of 229, it looks like bitcoin might be setting up for a bullish outlook.

Bitcoin (BTCUSD) 4H Chart 5/21
bitcoin 4h chart 5/21
(click to enlarge)

In the 4H chart we can also see that just under 240 is a common support/resistance area. A break above 240 would ensure a break above this support/resistance area, the falling channel, and he 200-, 100-, and 50-period simple moving averages (SMAs). If the RSI also pushes above 40, a break above 240 should open up a bullish continuation outlook. Note also, that the hold above 230 for the most part keeps btcusd above the middle of its late-April to May price range, another indication that bitcoin is anchoring upwards.

The bullish outlook developing in the 4H chart will be going against a medium-term bearish mode seen in the daily chart.

Bitcoin (BTCUSD) Daily Chart 5/21
bitcoin daily chart 5/21
(click to enlarge)

We can say that the trend has flattened, but it definitely has not turned bullish. In fact because price is still mostly under the 200- 100-, and 50-day SMA while the RSI is holding below 60, the technical picture would be bearish-neutral.

But, if we do break above 240, pressure will be on 249-250. A break above 250 would open up the 280 area, where the 200-day SMA resides. The most aggressive bullish outlook for now should be limited to the 300-315 resistance area.

Now, if instead of breaking above 240, price falls below the May-low of 226, then we are likely still in a bear’s market with pressure at least to the 214 support, and possibly the 200 psychological level. Below 200, the 166 low on the year would come into play.

Previous Post by Author: EUR/USD – Fundamental and Technical Update 5/21

SHARE
Previous articleEUR/USD – Fundamental and Technical Update (5/21)
Next articleGold – Bullish Outlook Might Fail if Price Falls Below 1200
Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.