We present you a translation of an article on the analysis of the Bitcoin market from analyst Omkar Godboul. In the article, he gives his forecast for the development of the situation on the cryptocurrency market: a popular price indicator signals a long-term bullish reversal. Thanks to this, the BTC can extend the last rally to $ 6000 over the next few months.
The 14-week relative strength index RSI is an indicator used to determine overbought or oversold conditions. It is noteworthy that it was fixed above the key resistance range of 53–55, which acted as a strong support in the bull market of 2015–2017.
The indicator returned to the bullish area, reinforcing the assumption of a long-term bullish reversal, which was signaled by the reversal of the bearish pattern with lower highs and lower lows on April 2.
As a result, in the near future, BTC can test the previous level of support, which has become a resistance, of $ 6,000.
At the time of this writing, the leading cryptocurrency is trading at Bitstamp at about $ 5,300, an increase over the last 24 hours is 0.20%. From April 3, the price is largely limited to the range of $ 4900-$ 5500, and before the price rises to $ 6000, a rollback may well occur.
Weekly schedule
The 14-week RSI received support above the resistance range of 53-55.
A value above 50 indicates bull conditions. The 53-55 range is set by the weekly RSI as a crucial level of support during the 2.5-year bull market, which led to a record high of $ 20,000.
In that bull market, bears didn’t have enough strength to push RSI below 53. In addition, RSI’s break below 53 in January 2018 was followed by a severe bearish period during which the price fell to lows around $ 3,100 in December.
Also note that the repeated failure of the RSI to attempt to overcome level 53 in the five months to October 2018 led to a significant drop below $ 6000 on November 14.
Thus, due to the fact that the RSI has now settled above 55, the more long-term change in the bearish trend to bullish is quite reasonable, and the BTC may rise to the previous level of support, which has become resistance, at $ 6,000 over the next few months.
This is also confirmed by the 5-week MA and the 10-week MA, which are directed upwards for the first time since the beginning of December 2017 (favoring the bulls). These bullish MAs, currently located at $ 5045 and $ 4505, may suspend any subsequent kickbacks.
Daily schedule
On the daily chart, signs of bullish exhaustion appeared. For example, a candlestick doji was formed on Friday, and the course remained more or less stable over the weekend. Nevertheless, the assumption of a deeper price pullback can only be confirmed if the recent minimum is updated ($ 4934).
At the same time, a break below this level cannot be ruled out, because after a major bull break a determination and strength of buyers is often tested. For example, the level of the 100-day MA, which was overcome on February 19, was repeatedly tested for 10 days until March 4, before steady growth continued.
Similarly, BTC may return to the 200-day MA (currently $ 4482) before continuing growth.
However, bulls can be activated within the next 24 hours if the bear pattern shown in the chart below is canceled.
1 hour chart
Currently, the BTC is near the upper level of the bearish channel, canceling last week both the RSI bearish divergence and the bearish break of the downward wedge due to the repeated protection of the support level of $ 5,170.
Thus, a bullish channel breakout seems likely. It may be followed by repeated testing of a recent high ($ 5466).
On the other hand, a break below $ 5,170 will increase the risk of falling to a recent low ($ 4,912).
BTC price forecast The
14-week BTC (RSI) relative strength index rose above the key resistance range of 53–55, confirming a long-term bullish reversal, which a bullish breakthrough of the downward channel testified two weeks ago.
As a result, BTC may rise to the previous level of support, which has become a resistance, of $ 6,000 over the next few months.
This growth may be preceded by a pullback to the 200-day MA, currently located just below $ 4500.
On the hourly chart, the cryptocurrency is going to break out of the downward channel. This may push the price to recent highs above $ 5460 in the next 1-2 days.