Trading Bitcoin: 32% Increase in 8 Hours, What’s Next?

32% Increase in 8 hours, What’s Next?

Last Friday, Bitcoin experienced a parabolic increase which was unparalleled to anything we’ve experienced since 2017. On the daily chart above, Bitcoin is on a sequential green 4. However, Bitcoin’s RSI has entered a bearish divergence. If Bitcoin’s RSI cannot create a higher high, price may have a greater chance of falling back to $8.2k. Another notable signal is the fact that the bulls were cleaning rejected by the 128MA (green). Over the course of Bitcoin’s history the 128MA has been a critical support level throughout uptrends, and a harsh resistance level during bear trends. The next target for the bulls will be to close above the 128MA. Additionally, the bulls will ideally want to remain above the $9.3k support level as well. This level served as critical support level during the creation of the spring descending triangle.

4 Hour

Ever since Bitcoin was rejected, the RSI on the 4 hour has created a bearish divergence. Furthermore, the sequential indicator is on a red 2 of 9 candle. In sequential theory, a red 2 closing below the previous red 1 is an indication to place a short trade. It is critical for the bulls to remain above the $9.3k support level or else a retest of the $8.3k support level is likely.

Conclusion

The Bitcoin bulls came out in full force last week as price increased 32% in 8 hours. Price finally was rejected by the 128MA (green) on the daily chart. Now Bitcoin’s RSI on the daily and 4 hour have both entered a bearish divergence. For now, it appears the trend has cooled off. If Bitcoin’s RSI cannot create a higher high look for a possible retest of the $8.3k support level. If the bulls can remain above $9.3k and form support over the next few days, look for a retest of the $10k psychological support level.

Disclaimer: The author of the article hodls Bitcoin.