Bitcoin price leaps 2.35 percent to $254.66, successfully meeting our price target discussed in Target Met. The cryptocurrency hit a fresh 7-week high of $255.90 on the back of strong momentum. But now that Bitcoin has found its ceiling, it may struggle to accumulate more gains easily. On the contrary, we might witness fresh selling pressure at the current level.
Today, we are analyzing the 4h BTC-USD price chart to look for the latest trading clues.
Bitcoin Chart Structure – In accordance with the upward trading channel, Bitcoin hit the resistance near $256. If the Bitcoin market witnesses profit booking, long positions should be built closer to the support of $245.
Bollinger Bands – Apart from the resistance trendline, the upside potential is also capped by the upper limit of the BB, which is currently at $254.6485. The lower limit seamlessly coincides with the support mentioned above.
Moving Average Convergence Divergence – The MACD has greatly extended its lead over the Signal Line, however, that may soon be reversed. The current values of MACD, Signal Line and Histogram are 2.1139, 1.5558 and 0.5580.
Momentum – The Momentum value eased from a fresh one-month high of 10.1700 to 5.2400.
Money Flow Index – On a 4h basis, Bitcoin has a lot more room to amass gains before it gets overbought. That is conveyed by the latest MFI value of 59.2936.
Relative Strength Index – An exact opposite to MFI indication is reflected by the high RSI reading of 68.9503. Values at or above 70 generally indicate overbought conditions.
Bitcoin is indeed trading in a strong uptrend, but, buyers should wait for low-risk sub-$250 levels before making their trades. High-risk traders can also create short positions now by placing a tight stop-loss above $256 for a target of $248.
Trade near the price extremes to minimize the loss potential. Refrain from using deep stop-losses.