So, there’s a load of good news today. It’s 4/20 (for all my smokers out there), and it appears that Bitcoin has finally broken out of its long-term downtrend.
So, as stated in the picture above — we need to make sure that we wait until the candle closes above the long-term downtrend before we get too exuberant!
Now, in looking at the formation of the candles, I noticed what could be a potential cup and handle pattern.
Check it out below:
Now, typically for such patterns, the height from the bottom to the top of the cup is where you would throw your projections for a first ‘target’ of sorts.
So, it looks like the breakout from the handle (if the cup and handle pattern is to be deemed valid here), started around roughly $8,150.
So, the target on that would be $8,150+$2,475.72 if this pattern is legitimate. That would put us around the ball park of $10.7k.
Let’s Not Get Too Exuberant Just Yet!
There are still psychological barriers as well as a number of resistance points above from where we are that must be overcame before we can really say that we’re all the way out of the woods.
#1 — We Need to Break Ourselves Free of the EMA Indicators
This has actually almost been completed.
As you can see above near that most recent green candle — the price has broken completely above the EMA-50 (gold line), which is the epitome of bullish at this point in time.
The price has also peaked its head above the EMA-200 as well, which is yet again another bullish sign. We won’t have to worry about those being points of resistance above our heads for the price. They’ll also be solid resistance points as well.
#2 — Former Point of Resistance
As we can see, the price of $9.1–9.2k has served as a pretty major resistance point before, so there should be some challenges getting past here.
#3 — Ichimoku Cloud
So, we can see here that the price is currently nudging against that Ichimoku cloud, but it’s might damn close to breaking through. This, once again, would be another major bullish indicator. It’s been a long, long time since bitcoin has been above this cloud.
In fact, the price of bitcoin has not been above the Ichimoku cloud on the daily chart since January 10th, 2018:
That’s it for Resistance points until we get up to $9.5k and above and we’ll do another review once we get there.
For now, it looks safe (relatively) to pursue a potential long from this point. This is just my personal opinion (I’m not a financial adviser this is all for your amusement. If you decide to use the information contained within here to make actual investment decisions, that’s on you! 😊 ).
RSI is looking beautiful as well. Rocketing up and not even in the oversold territory yet. RSI has officially passed the ‘50’ mark, which is a classic buy signal on RSI.
It’s been zooming upward like we’ve typically seen on bitcoin bull thrusts.
Only thing left to do here is play the market smart, be aware of any changes in sentiment or other indicators and play everything smart!
If you do that, you should really be able to make some solid scratch in the markets.