- Recent Bitcoin surge linked to technical level breakout at $4,200.
- The RSI signals sideways trading in a range between $4,700 and $5,000.
- Bitcoin bulls change their focus to $6,000 and $8,000 in the long-term.
Following weeks of calm on the cryptocurrency market, Bitcoin extended the gains above both the 100 SMA 2-hour and the 200 SMA 2-hour. For some time, the level of $4,200 had become the biggest barrier to the upside. However, the breakout past $4,200 on Tuesday catalyzed further gains in an engulfing candle sending BTC/USD above $5,000 for the first time in five months.
Bitcoin short-term technical outlook – 2-hour chart
Bitcoin has embarked on a new trend upwards within a forming rising channel. The upper trendline of the channel continues to cap the upside while the lower trendline is currently working as key support. In the short-term, Bitcoin technical outlook is bearish and the time for correction is here.
According to the Relative Strength Index (RSI), Bitcoin is past the time for formidable swings like yesterday. However, the indicator at 70.00 is sliding along a horizontal line to show that sideways trading is the likely movement. The indicator zoomed to highs close to 100 during the surge but has been correcting ever since. Therefore, we can expect Bitcoin to start a consolidation phase between $4,700 (support) and $5,000 (resistance limit).
Key Technical Levels:
Resistance 1: $5,000
Resistance 2: $5,100 (Wednesday high on Coinbase)
Support 1: $4,700 (Previous day support)
Support 2: $4,200 (Tuesday breakout point, now key support)
100 SMA 2-hour: $4,287.52
200 SMA 2-hour: 4,141.16
BTC/USD Daily Range
The daily chart shows how BTC bulls have changed their long-term focus to the range between $6,000 and $8,000. The digital asset trading at $4,951 at press time is supported by the 200 SMA daily currently at $4,629.54 as well as $4,020. The long-term outlook remains strongly bullish as the gap between the 100 SMA and the 200 SMA narrows to show that the bulls are in control. In the daily range, the RSI is still in a steep trend inside the overbought. All that Bitcoin needs, in the short-term, is to retrace the steps above $5,000 and focus on the levels towards $6,000.
John is a talented writer with over two years of experience actively contributing to the cryptocurrency industry by providing credible, interesting and easy to read the content. His main focus is on cryptocurrency price analysis and industry news coverage. Lets follow him on Twitter at @jjisige