Friday recorded a relatively strong drop as the price was rejected from levels above the 100EMA but this weekend has recovered almost all of Friday’s decline and looks set for a move higher. Since the 10% gain from this week as reported here, the price has mainly been trading in a range from about the $7300 level to $7500 with resistance at $7550.
There is a strong case to be made for the current price action forming a bull flag as it trades in this range. Another close above the 100EMA would be a bullish sign and a strong statement by the market that Bitcoins price should be valued above this point. In the case of a close above the 100EMA, bullish momentum may be enough to break through the $7550 resistance and come up to the $7850 mark. This case is seen as likely with Friday’s drop looking like a higher low, which is an indication of an uptrend.
If a move up to the $7850 price occurs, the next significant move after that could be to the downside or the upside. We have seen price blasting through the $6850 point this week so the same could happen at $7850. On the other side, $7850 has been a significant point of trading activity in the past, and any big traders (known as whales) that maintain a bearish viewpoint should achieve sufficient liquidity here to take short positions which would put a lot of downward pressure on the price.
On the hourly chart, we can see the price is trading above the 50, 100, & 200EMA. As anticipated in yesterday’s post, the 200EMA is currently trading around the $7100 mark which analysts predict will act as support if a movement to the downside occurs.
- A Bull Flag pattern in play and appears as if a higher low was priced in on Friday, both bullish signs signaling future movement to the upside.
- Weekend gains have retraced all the losses of Friday.
- Resistance at $7550 but a close above the 100EMA will make it more likely that this level is broken.
- Significant trading activity to be expected at $7850.
- In the event of a movement to the downside, $7100 and hourly 200EMA is expected to act as support.