ForexMinute.com — It has been a crazy day in the cryptocurrency markets, thanks to Bitcoin and its surplus explosion after a heavy buyout. The surge looks almost like a result of some crazy billionaire on cocaine, for there have been no fundamental aspect until now that could explain the buying madness. Optimists are back on forums.
The European session is now in play as well, and we do expect people to short their positions to churn out an attractive profit. In case the upside volatility hints to extend, the Bitcoin will definitely be targeting the April 2013’s bubble peak around $266. This will be, my readers, our watch-out level before a pullback. Let’s have an elaborated view:
Bitcoin 4H Chart
The 4H BitFinex chart above, for obvious reasons, is trending inside a extended bullish bias. The price is definitely a way too above the 50, 100 and 200H SMA curves and the RSI has also went inside an overbought zone, awaiting corrections. The MACD indicator meanwhile has jumped above its usual troposphere, and is indicating a strong buying mood of the market.
At this point of time, we believe Bitcoin to treat 255.00 as its in-term resistance level, no wonder how weak it may seem amid such a volatile session. On the downside, 245.30 continues to stay as the current in-term support line. We expect price to stay between this range, if volatility excuses.
We will however be looking for price to attempt a break above the in-term resistance line, only to validate 266 as its primary upside target — the April 2013’s peak point. This particular level is hopeful to incite selling, where Bitcoin might once again fall towards the next downside target. We will therefore be recommending our traders to place a long position towards the primary level only if they see a break above 255. Meanwhile, they will also be recommended to place their stop loss near 253 to avoid being chopped off in case of a bias reversal.
Conversely, if price rebounds from 255, it would be neatly targeting 250 as a temporary downside target — also psychological. A break below this level would instantly validate 245.30 as the in-term support, something that will also bring some attractively risky short positions. We will still recommend you to keep your target above the in-term support level, around 246 perhaps, as the downside volatility might be scary after an explosive pump.