Bitcoin Bulls Bring the Price up to $7850

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As anticipated in yesterday’s article, Bitcoin looked bullish coming into this week, and it did successfully make a move to the upside. It was uncertain whether there would be a move to the upside or the downside once price reached $7850 but for the moment, this point is acting as resistance.

After trading in a tight range over the past few days, the bull flag pattern was successfully formed, and traders who forecasted this while Bitcoin was trading in a range would have capitalized on today’s upward movement. In addition to $7850 being a significant level for resistance, this is also where the 200EMA is currently at adding further strength to this as a resistance point. Today’s move upward is on significant volume, and another test of the $7850 point is to be expected going forward.

Bitcoin Daily Chart

Price action is currently trading at $7700, after retracing approximately 2% upon approaching the $7850 resistance point. The last few hours have been fairly flat trading on low volume which tends to be the case after a directional move such as the one we have seen.

On the hourly, the price is trading above the 50, 100, and 200EMA and we may see a mean reversion to the 50EMA before another move up and retest of the $7850 point. MACD looks to cross its signal line to the downside, a bearish signal, which would further the case for price retracing back to the moving averages.

Bitcoin 1hr Chart

Futures are once again trading at a premium, known as contango. When futures trade at a premium, this adds extra selling pressure to the market with miners selling the futures to lock in a profit ahead of time.

The premium is quite small though, meaning that it may not add many sellers. However, if the premium widens, significant selling pressure may come into the market. We can also see that the amount of longs on Bitfinex has increased almost 10% over the past 24 hours while shorts has dropped about 1%.

Key Takeaways:

  • A strong bullish start to the week with bull flag successfully formed.
  • Resistance at $7850, also the point where the daily 200EMA is trading.
  • Futures are once again trading at a premium and should be monitored as a gauge for additional selling pressure entering the market.
  • May see a mean reversion to the hourly 50EMA before a retest of $7850.
  • In the event of a strong downside move, the moving averages on the hourly should act as support levels
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Bitcoin Bulls Bring the Price up to $7850 was originally found on [blokt] – Blockchain, Bitcoin & Cryptocurrency News.