Bitcoin price has been traded through resistance – an initial sign of a larger wave of advance. A few cautions remain as we await additional confirmation that resistance has become support.
Time of analysis: 14h00 UTC
From the analysis pages of xbt.social, earlier today:
A terrific wave of advance has breached the upper boundary of the resistance ceiling and, at the time of writing, there is profit-taking just below $480 (Bitstamp), $500 (OKCoin Futures) and 3000 CNY.
Last year’s November high remains as the final frontier to a new high 18-month high.
The indicators are severely overbought – and diverging – at all timeframes below 4-hour, but this is often the case during strong advance. If the 1-day chart’s MACD and RSI divergence (magenta annotations) forces a pullback, then there is a risk that price may drop back below the resistance zone (red) today.
With the above caution in mind, we now wait to see technical confirmation in the price chart that the market has established the 6-month resistance zone as a new support level . An ideal sign would be if price can open (on Saturday) a new 1-day candle above $470 and 3100 CNY as well as close the candle above this level on Sunday.
Falling back below the resistance zone would put continuing advance in doubt, but for now the market’s task is simple: continue advancing to $500 (Bitstamp) or consolidate above $470 to establish it as support.
Bitcoin price made a swift clean break above resistance today, and we now wait to see price establish $470 (Bitstamp) and 3100 CNY as a support level. It would be prudent to remain on the sidelines until the confirmation comes in on Sunday, via consolidation above this level. Alternatively, continuing advance toward $500 would show that resistance has been decisively broken.
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Last modified (UTC): May 27, 2016 16:46