The Bitcoin Stalemate Continues: $5k Incoming?

Bitcoin has been stuck at $4k for the past few weeks and it is likely that a large move will occur soon.

The weekly chart (above) remains in a neutral posture with an eight candle. However, Bitcoin still cannot break above the Feb. 18th high of $4.2k. While the weekly chart is neutral when looking at the sequential indicator, a bearish perspective would suggest the gradual price increase over the past few weeks has lead to the formation of a rising wedge pattern. In classical charting, rising wedges are bearish indicators. Additionally, descending volume is not a positive sign for the bulls and could indicate a possible trend reversal.

The daily chart (below) is currently at a red-three candle, not indicating much. If the bulls can break above prior resistance at $4.2k, there is potential for price to increase to $4.8k – $5k before running into the 200 MA (purple). Very recently, the 50 MA (red) crossed over the 128 MA (green) which is known in technical analysis as a ‘silver cross’. A silver cross typically indicates the beginning of a bullish uptrend.

From a bullish perspective, these moving averages have created a strong support level for Bitcoin at roughly $3.9k. Price has been stuck in a tight range with little volatility and low volume. Just as the previous break below $6k came with the tightening of a descending triangle, our current price is tightening in what some speculate is an ascending triangle. In classical technical analysis, ascending triangles break to the upside 70% of the time. 

The Weekly RSI (below) is at a critical level in Bitcoin’s history. A break above 41 on the RSI would be significant, as this level indicated the end of the 2015 bear market. 

Conclusion

We are reaching a point where the trend must be defined in one direction or the other. There are many conflicting indicators mentioned in the article. Above all, the bulls are in control for now. 

Disclaimer: This is not financial advice. Please do your research independently and make objective decisions. The author of the article owns cryptocurrency.