Bitcoin reaches over $3,900 today before falling back

CoinDesk analysis

A CoinDesk article by Omkar Godbole analyses the price movement of Bitcoin (BTC) today up to when it was posted at 11:08 UTC. Godbole notes that BTC had already passed through key resistance yesterday indicating a stronger rally above $4,000.

Yesterday, BTC broke through $3,633 picking up a strong bid just after the anniversary of its all-time high last year. The probability of a bullish three-day close above the $3,590 level Thursday is rendered quite probable. The short-term scenario is bullish. The next resistance levels are $4,000 and $4,410 the November 29 high.

As Godbole’s article went to press, BTC was trading at $3,750 on Bitstamp. It marked a two-week high of $3,776 earlier today. Although BTC has recovered 20 percent from a recent low of $3,122 it is down 73 percent still over the year.

Chart analysis

The daily chart shows BTC closing above the $3,633 level indicating an increasingly bullish setup as represented by the positive divergence of the 14-day relative strength index (RSI) plus the falling wedge breakout. More evidence of the bears weakening is in the bullish crossover between the 5 and 10-day exponential moving averages (EMA).

The hourly chart shows the bull flag breakout of yesterday has created room for a rally to $3,840. Both the rising trendline and also the stacking order of the simple moving averages (MA) support the continuation of the recovery rally.

The monthly chart outlook would turn bullish if prices beat the 21-month EMA that is at present $ 5,728.

Godbole’s view

Based on his analysis Godbole believes: “Tuesday’s close above $3,633 confirmed a short-term bearish-to-bullish trend change. BTC will likely test the psychological level of $4,000 in the next 48 hours, with the next target being resistance at $4,410 (Nov. 29 high). A daily close below $3,633 would weaken the bullish scenario, but is looking unlikely in the short-term.”

Present situation

24 hours ago BTC was trading at $3,724. it was as low as $3,646 and rose up over $3,900 to $3,929. At 20:55 Central Standard Time it had fallen back to $3,732 just a little over 8 dollars over what it had opened. Even though BTC has not broken through the $4,000 level as yet it has come close. However, the price has dropped back considerably since then. We will need to wait and see if the rally continues or if the recent drops will continue for a while as suggested in the colorful winter video appended. The present price of Bitcoin can be found here.

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