Bitcoin price broke out overnight and retested the $4k handle for the sixth time since the lows of the middle of December 2018. Let’s take a look at what this might mean going into the rest of the weekend.
Bitcoin Price: 4-Hour Chart
Looking at the 4-hour chart, we can see that Bitcoin price 00 bolted out of the gates almost immediately after Friday’s candle close, breaking the weekly range high of $3950 which we discussed earlier this week.
The bears stepped in and pushed bitcoin price back from highs of $4040 back down to $4000 at the time of writing.
The next objective for the bulls is that they now need to flip the prior resistance of $3950 into support.
Looking at the chart, we can see that there was an early sign of price looking to trend higher, with the OBV and MACD both breaking out to the upside around noon on Friday.
Both of these are trending higher with no sign of slowing down at present but should be observed closely over the weekend to identify where market momentum may be at risk.
Looking at the 1-day chart, we can see that there is are multifaceted arguments available to support the case that the bulls want to take this market higher, with the latest being a lower time frame breakout in the 14-month declining resistance and now an inverted head and shoulders forming, which would also act as a third higher low for Bitcoin.
Should the bulls capitalize at this point, the measured move target will be towards $5k, however, we remain in a bear market. A voluminous break and close above $4200 would be extremely encouraging for the bulls. However, another failure to break the $4k handle will be a stark reminder that the bears are still very much in control.
A quick preview of the weekly chart shows that bitcoin is still being capped by the center line of the Bollinger Bands, which is the 20-week moving average.
This has been the bull’s nemesis all the way through this bear market as occurred during the 2014 decline, which was ultimately broken in July 2015. This ultimately became the indicator that the bottom was in.
However, the bands (being two standard deviations from the 20WMA), are still very wide, which implies that a move now by either party would potentially carry a large range with it, with the highs of the bands being around $5500 and the lows being $2330.
In addition, the Stoch RSI also looks to be ready to roll over in the overbought zone, but this could still take some time to occur and is contrary to the MACD.
As we have seen several times before these markets can take some time to bottom. Indeed, although looking positive at the moment, this is not a done deal yet and there could be several more attempts to break this bear market.
Overall this is an important and pivotal point for bitcoin price. As we talked earlier in the week, pressure continues to build in this market and it is only a matter of time before a more significant move occurs.
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