In a very recent analysis titled Deafening Silence, I had advised the market participants to create fresh positions only near the marked support and resistance levels. I had also explicitly stated that a close above $280 could be a sign that Bitcoin is preparing for its next leg of the rally. And since Friday, we have achieved both of these things: above $280, the price has soared to hit an intraday high of $294.35, and it can be seen struggling near the upward sloping resistance.
From our Friday’s observation, the price has surged by $16.3 or 5.90% to be trading at $292.79.
Technically, Bitcoin is at a strong resistance level, but that may not hold in the coming sessions.
Bitcoin Chart Structure – Bitcoin spent a considerable time forming a base above its previous peak of $271.50 before taking off, thereby refusing to violate the higher top, higher bottom structure in place since the last week of June. Even though the price is near the supply zone, it may target its previous peak of $310.
Moving Average Convergence Divergence – The Histogram has finally kissed the positive territory as MACD gains above the Signal Line. The latest values of MACD, Signal Line and Histogram are 7.3215, 7.0732 and 0.2483 respectively.
Momentum – The Momentum indicator has reversed all the losses and has turned strongly positive at 13.3600.
Money Flow Index – The rise in the MFI value to 48.9272 is pushing me to believe that there may be more gains in store for Bitcoin.
Relative Strength Index – The rise in Bitcoin is supported by an increase in the RSI value of 64.0529.
Bitcoin may push the price above the resistance in the coming sessions, but it would be a pure gamble to believe that it may happen without a dip. The indicators are turning in favor of the buyers and therefore, use dips to go long on Bitcoin. Aggressive traders can also choose to create short positions now by placing a strict stop-loss north of the resistance line and cover on declines.