Bitcoin’s price has gone up over $300 and now it’s dealing with a technical hurdle, which if surpassed will spark a strong rally, as suggested by the analysts.
The price of bitcoin began to ascent at 15:00 UTC, invalidating the trading range from $3,580-$3,630. This move was made after the previous resistance of 18 December near $3,550. This level is now seen to successfully flip to support as a consequence of the latest boost.
It seems that the bitcoin bulls are trying to extend and revive their rally after the prices were pushed over $4,000 eight days before, but were unable to succeed due to the holiday sell-off from 24 December peak of $4,236.
At present, the cryptocurrency is trading at an average price of $3,842, as reported by the sources.
The positive price reaction to several technical hurdles is seen in the daily chart. The daily chart showed how the price bounced on a confluence of support including the daily Bollinger band basis line, Fibonacci retracement of 61.8%, along with the resistance area near $3,500 and the prior support.
If the bulls want to scale the rally towards $5,000, the price of bitcoin must scale the neckline of the inverse head and shoulders pattern which is widely observed and is also an indicator of the bullish reversal.
The pattern of the daily chart can be seen as three successive troughs with the deepest middle or “head”. If bitcoin finds acceptance which is above the neckline, then the prices can rise to $5,200.
The recent bullish development is also depicted by the hourly chart. A bear flag can be seen onside the falling wedge which is a mark of a bullish reversal pattern. It can be said that the bear flag has been invalidated by the latest boost of bitcoin and price now has different resistances.
Source: Coin Desk, Crypto Town