Bitcoin reaches a crucial resistance

Finally, fundamental analysts have something to write about. The price has been moving very technically recently. We haven’t heard much from Downing Street (Brexit), Donald Trump (trade wars etc.) or Mario Draghi. Last several hours changed that and we received series of events that triggered risk off mode on the market. In this piece, we will write about bitcoin. I do not really know if BTC can be perceived as a safe heaven asset yet, but the fact is that this cryptocurrency is currently gaining traction.

From a technical point of view, the recent price action is precisely what I’ve been waiting for for quite a long time – BTC finally reached the horizontal resistance at around 5,900 USD (yellow). That resistance was a crucial long-term support, respected repeatedly in 2017 and 2018. The idea that we should reach this area was born in the middle of March when the price broke the long-term downwards trend line (blue) and the upper line of the symmetrical triangle pattern. After this, the price surged, waking up hopeless bitcoin bulls.

OK, we reached the resistance but what now? Well. This looks like a good place for a bounce but the simple fact that the price is there is not enough for us to open short position. A sell signal will be triggered when the price breaks the black line, which in this case would be the neckline of the triple top formation. On the other hand, closing the day above the yellow area would be a legitimate signal to go long on this crypto.

Source: Alpari