Bitcoin Price Rally Nears $500

Journalist:
May 28, 2016

The bitcoin price rally reached close to $500 and 3600 CNY today. Advance is strong and has left the indicators tilted, yet technical tools such as support and resistance and moving averages allow traders to determine targets and likely entry and exit levels.

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Bitcoin Price Analysis

Time of analysis: 14h00 UTC

Bitstamp 1-Hour Candle Chart

From the analysis pages of xbt.social, earlier today:

That today’s 1-day price candle will confirm the $470 resistance as definitively broken, is not a maybe: it stretches green from $470 to $497 in the Bitstamp chart. OKCoin’s 3-month futures contract reached to $540 earlier today and the CNY charts have thundered past their November 2015 high.

The past two days’ advance has been unusually strong, and this raises some concern for a looming pullback, although the rally is (according to the 1-day chart indicators) far from over.

Our usual 1-hour reference chart has all of the momentum indicators in either severe overbought state or in advanced divergence. As we’ve seen, this is often the case during bitcoin price rallies and we have to revert to rudimentary technical tools such as support and resistance and moving averages to navigate bitcoin price waves.

A few weeks ago it was illustrated how there are major support and resistance zones around $550 and $680 in the Bitstamp chart. Once the market has negotiated and advanced above $500, we’d expect $550 to be the next major reaction zone for the larger trend.

Summary

Bitcoin price capitulated the swift clean break above $470 resistance by advancing to near $500. This level may pause price advance for a day or two. Also bear in mind that we’ve not yet seen $470 tested in the 1-day chart. Once above $550, the next major support and resistance level waits at $550 (Bitstamp).

Bitfinex Depth Chart and Buy/Sell Volume

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Disclaimer

The writer trades Bitcoin. Trade and Investment is risky. CCN.LA accepts no liability for losses incurred as a result of anything written in this Bitcoin price analysis report.

Bitcoin price charts from TradingView.
Image from Shutterstock.

Venzen Khaosan @venzen

Market analyst and Open source developer with a keen interest in blockchain technology, consensus mechanisms and the decentralizing effect. He has found a solution to the PKI mechanism. Email me to discuss.