Bitcoin is developing bullish momentum and a bullish outlook in the 1H chart. It has rallied frmo 442 to 534 then consolidated. But it is again developing a bullish outlook.
– Price is now trading above the 200-, 100-, and 50-hour Simple Moving Averages (SMAs).
– Price broke above a falling trendline, and remains above a rising one.
– The 1H RSI has held above 40, and has tagged 70.
Bitcoin in the 1H chart looks poised to test the 534 high. But first we are dealing with an intra-session pullback. If price can stay above 508, and the 1H RSI above 40, we should still be looking at a bullish market in the near-term. A break below 500, would be a very clear sign that the bullish outlook is over, especially if the RSI is dragged below 30.
If bitcoin respects the cluster of SMAs in teh 1H chart, and climbs back above 510, we should be looking for a swing towards 530-535 resistance area.
This would complete an inverted head and shoulders pattern seen in the 4H chart. A break above 534 thus sets up a bullish outlook. However, we should be aware of sellers in the 560-580 area. But then, if price falls and respects the price bottom, the bullish outlook will be even more likely.
Bitcoin 4H Chart 8/27
(click to enlarge)
But let’s not get ahead of ourselves yet. There is still no inverted head and shoulders, and the 4H chart still has a bearish bias.
– Moving averages are in bearish alignment and sloping down.
– Price is below the 200-, and 100-period SMA, and if it pushes below the 50-period SMA, we are likely in bearish continuation.
– The 4H RSI is still holding below 60, after a brief violation.
The bearish outlook will be challenged at 487. A break below 480 then revives the bearish outlook to 442, then the 420 lows from April-May.
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