Bitcoin price surges higher but remains within the area of the recent correction. Technical analysis looks at levels and confirmation of advance.
Time of analysis: 14h30 UTC
From the analysis pages of xbt.social, earlier today:
Price has surged higher from its 1-hour 20-period moving average (20MA).
Although this could very well be the start of the next wave of advance toward upside targets at $600 and $680, there are two concerns that warrant caution:
1) The small parabolic wave of the past few hours typically characterizes the ending of a surging move.
2) Price has not yet left the area of recent correction (blue rectangle).
Given the above, price may continue correcting inside the constraints of the blue rectangle.
The push higher above both the ascending 20MA (green) and 200MA (red) is encouraging. If price were to continue higher it should soon fall into a sideways consolidation, wait for the 20MA to catch up, and then continue advancing. This would be an appropriate moment to open a buy position.
Should correction continue, we’d want to see price hold above the red 200MA, since any move below that opens up testing of lower support, namely $500 (Bitstamp) and even the previous $470 resistance level.
Bitcoin price is pushing higher but speculators should be cautious of the current position of price. Before positioning long, wait for price to test support of its 1hr 20MA – possibly after a sideways consolidation. The current risk is that today’s surge could only be (an ending) component of the recent price correction. Dropping below the 1hr 20MA will confirm this notion, while dropping below the 200MA will signal additional downward correction.
What do readers think? Please comment below.
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Bitcoin price charts from TradingView.
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