The Bull flag in Bitcoin’s price carried out perfectly with the price currently trading over $8000 and over the 200EMA on the daily. Bitcoins price briefly approached the $8400 mark but has retraced back near the $8200 mark. This is the first time Bitcoin has been trading back over the 200EMA since early May.
The rise has been on large volume and could definitely continue to the $8500-$8600 mark, a point of significant trading in May. RSI has been forming higher highs along with price action and has actually entered the overbought territory. However, as long as the RSI does not diverge from price action it would be likely that buying pressure can force another push up in price.
The 200EMA is trading at the $7850 mark and in the event that price was to drop back below $8000, this point should act as significant support.
As was anticipated, $7850 acted as significant resistance on the way up with price action touching off this point many times before breaking through. This can be seen clearly on the 4hr chart where a sudden surge in volume finally provided the bullish momentum for Bitcoin to break through the resistance.
Over the space of two hours, Bitcoin managed to rise from $7750 to $8250, around a 6% gain. Traders who spotted the bull flag forming and took long positions would have capitalized effectively on the market conditions.
On the 1hr chart, we can see the upward movement has taken a turn over the last two hours with a high being priced in near the $8400 mark. The current drop is on low volume and may just be a brief retracement before more buyers enter the market to push prices higher again.
The moving averages on the hourly illustrate how quickly this upward movement has been executed with the 50EMA still trading below $7800. The price action and RSI have both been forming higher highs on the hourly and seem to be pricing in a higher low currently, providing price does not drop much further from here.
- Bull Flag pattern came through with Bitcoin recording a 6% gain over the space of just two 4hr candles. Traders who anticipated would have profited well.
- $7850 acted as strong resistance as expected but a surge in volume provided enough momentum for the price to break through.
- RSI has entered overbought territory on the 1hr, but as long as it does not diverge from the price action, more buying pressure could still push the price higher.
- $7850 to act as significant support in the event of a drop below $8000.
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