Bitcoin Crosses Above $4,000: Genuine Rally or Bull Trap?

Just two days after Cboe announced that it was going to delist bitcoin futures, the cryptocurrency’s spot market turned near-term bullish.

The BTC/USD exchange rate surged 3.30-percent in the past 24 hours to establish a session high towards 4069. Simultaneously, the rest of the cryptocurrency market also went green, with Bitcoin Cash leading the bull pack with 17.81% gains, followed by Litecoin, EOS, and Ethereum that rose 8.44-, 5.47-, and 6.25-percent, respectively. On the whole, the cryptocurrency market capitalization added up to $6 billion worth of investments in a day.

All Top Cryptocurrencies Trended in Green This Saturday | Source: CMC

Not the First Time

The bitcoin rally follows an overstretched stable action since February25. The cryptocurrency’s significant levels remain unchanged as it traded inside a $200-range for almost two weeks. Before that, bitcoin failed when it came to piercing through key resistance areas. At the same time, the cryptocurrency received equally stronger support from bulls on every downside correction. Have a look at this chart to understand further.

BTC/USD Analysis | Source: Bitfinex.com

One can notice that bitcoin is trending inside a symmetricaltriangle defined by red trendlines. It is providing traders a clear understanding of the ongoing price action. As close as the bitcoin price gets to the triangle’s apex, the lesser the volume becomes. At the same time, every upside attempt is failed by a stronger red resistance trendline – barring a few instances of false breakouts. From mid-December to now, the BTC/USD market has seen six of such breakout attempts. The market is now in its seventh one.

Low Bitcoin Volume

Luke Martin, a hugely followed cryptocurrency trader, and analyst, expects the weekend to bring new volume spikes. He tweeted Friday:

The bitcoin market is somewhat mirroring Martin’s prediction. While there has been a modest volume spike on a daily chart, it is still not enough to kickstart a breakout run. Let’s have a closer look:

BTC/USD Analysis | Source: Bitfinex.com

The orange bar reflects the highest 4H trading volumes in the past two weeks. These are not comparable to the mad spikes the market saw between February 20 and 25 trading hours. Atop that, the BTC/USD market is below the orange bar and, at the same time, its Relative Strength Index, themomentum indicator, is already overbought.

Therefore, there is a considerable possibility of a bearish correction. There is not enough volume to support a breakout action.

Not a Rally, Until

Twitterati Trading Room drew an interesting graph reflecting key resistance areas bitcoin must break to establish a rally. As explained in the chart above, we are also expecting a confirmed bullish breakout once the price breaks above $4,408. However, according to the Trading Room, one should watch out for the moving averages. Excerpts from their statement:

“BTC 50 MA has crossed over 100 MA in Daily Chart for 1st time since Aug. Ideal Conditions for a Move towards 200/350 MA. Need big impulse move to confirm a breakout.”

Until that happens, every upside move would end up becoming a bull trap.

The post Bitcoin Crosses Above $4,000: Genuine Rally or Bull Trap? appeared first on NewsBTC.

16.03.2019 / 04:40 60
Crypto Market Wrap: Litecoin Lifted as Volume Hits Yearly High of Over $2 Billion Crypto Market Wrap: Litecoin Lifted as
Crypto markets continue upwards; Binance Coin and Litecoin on a rip, ABBC Coin surges out of nowhere. Market Wrap Crypto markets have continued their
Markets Hit Six Week High as Altcoin Rally Adds Another $10 Billion Markets Hit Six Week High as Altcoin
Yesterdays crypto market rally has continued for a second day adding a further $10 billion to total market capitalization. The push has driven
Crypto Market Wrap: $10 Billion Pumped Back in to Cryptocurrencies Crypto Market Wrap: $10 Billion Pumped
Market Wrap Crypto markets are on fire for the first time in 2019; Litecoin shooting for the moon, the rest not far behind. Following over a week of
A $10 Billion Christmas Gift for Crypto as Rally Continues A $10 Billion Christmas Gift for Crypto
FOMO Moments Crypto markets rallying once again; Ethereum, XRP and NEO leading the way. The Santa crypto rally has continued for the day before
Cryptocurrency Market Update: Bitcoin Cash Doubles in Three Days Cryptocurrency Market Update: Bitcoin
FOMO Moments A rare green Friday for crypto markets; Bitcoin Cash and SV are on a charge, Tron and Iota following. It makes a change to see markets
Bitcoin and Ether Surge 11% as Crypto Market Suddenly Adds $26 Billion Overnight Bitcoin and Ether Surge 11% as Crypto
The crypto market has added more than $26 billion in the past 24 hours, as major assets including bitcoin, Ethereum, and Bitcoin Cash rose by more
Comments (0)
Add a comment
Comment on