Bitcoin Maintains Bullish Bias, Eyeing $4,500 as Upside Target
Bitcoin on Monday maintained its bullish bias despite facing rejection by a strong resistance area.
The bitcoin-to-dollar exchange rate surged from $3,956 to $4,244 as the Asian session kicked in. The pair attempted a breakout action but got held by a moderate selling pressure near the session peak. By the European session, an interim bearish correction has brought bitcoin to its session low near $4,022. At press time, the Bitcoin/Dollar rate again is going through a minor accumulation period, which could enable the pair to retest $4,244 for a potential breakout.
Technically, bitcoin price has completed its inverse head and shoulder scenario with its neckline tied around $4,244. As the coin consolidates below this level, the likelihood of an extended downside correction is more. In the event of a breakout, the price could set its targets towards $4,418-4,500 area in the interim scenario, bringing adequate opportunities for small profits.
The 4H chart is also displaying a Goldern Cross scenario. The candlestick pattern is formed when a near-term moving average jumps above a long-term moving average. As of now, the 50-period moving average is clearly crossing above the 200-period moving average, confirming a breakout scenario for the bitcoin-dollar pair. On a daily chart, at the same time, the 50-period remains much below the 200-period, confirming that the breakout action – if it takes place – would not confirm an out-and-out bullish bias in long-term.
The RSI momentum indicator confirms a bullish presence after finding buyers in the 50-60 area. In the wake of the aforementioned bullish indicators, there is a likelihood for the RSI to attempt a go at the overbought area.
Meanwhile, the quoted dollar looked weaker on Monday, over a partial government shutdown in the US. Its impact on the bitcoin market cannot be identified at press time.
Bitcoin/Dollar Intraday Targets
Using the same chart above, we have defined our today’s range by $4,244 as interim resistance and $3,976 as interim support.
Our day begins by entering a long position towards $4,244 with plans to extend it on a breakout action, towards $4,500, our psychological upside target. As we pursue the bullish sentiment, we would maintain our stop loss just 1-pip below our entry position. It would ensure that we don’t lose much should there be a sign of an extended downside correction.
In case bitcoin confirms $4,244 as resistance and reverses, then we will open a short position towards $3,976 while eyeing the 50-period moving average as our potential downside target. As usual, we would maintain our stop-loss order just 1-pip above the entry position to manage our risks efficiently.
Featured image from Shutterstock.
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