By
Steve Muchoki
April 19th, 2024
Bitcoin moves up on Wednesday reaching two-week highs. The rally combined with the prevailing bull flags indicate that recovery may be peeping just around the horizon – in 2019, for example.
2018 has long been a bearish year for the crypto markets with Bitcoin leading the losers. Bitcoin’s (BTC) bullish rally came on December 20 poising prices to two-week highs towering the psychological hurdle of $4,000. The crypto rose to a high of $4,067 at 09:06 UTC a level last traded on December 4. Furthermore, its market capitalization also hit a two-week high of above $70 billion.
Before the market broke, there was mild sell offs up to around $4,000 to $4,100. But, the bulls gained momentum and carried the day. Following the break up from the now mild support at $3,000, how far can Bitcoin rise? The market is today enjoying a third straight day of recovery. As noted earlier, the second day of recovery saw Bitcoin rise towards two-week high prices.
The Rally
Wednesday’s rally at the close of the daily candlestick enabled Bitcoin to rise over the $3,800 level on Bitfinex. Thus, the crypto made four green daily closes in a row. Since that rally, Bitcoin maintained a bullish momentum breaking the $3,900 and $4,000 support levels on Thursday. Since the first breakout, trading volumes are slightly increasing with every upward move.
But, it is still too early to call a change in momentum. However, there are no clear divergences in price and relative strength indicators to make conclusive deductions.
Bull Signs
In the late 2017 Bull Run, the Bitcoin price charts made and then broke out of the bull flag formations. That did not happen just once but many times in a row. Back then, the token experienced an almost unstoppable rise from $5,000 to almost $20,000. The primary characteristics to the chart pattern are a significant move up known as the flagpole.
The upward move is followed by a sideways consolidation in price that retests lower support levels. After the formation of the parallel channel (flag), the price usually breaks out upwards featuring increased trading volume. That occurrence signifies an enhanced bullish momentum. At that instance, the price action forms a new higher low.
At the time of writing, Bitcoin was trading at $4,100, up over 28% from the 15-month low of $3,122 from earlier this week. The recovery rally was long overdue since the crypto seemed extremely oversold. It lost 50% of its value in the last four weeks. The price action agrees with the expectations of an ex-Goldman executive who believes that BTC will rise in the long-term. He said:
“It feels like being at the early days of trading equities electronically. It’s early stage, there’s a lot of opportunities to build great businesses and have an impact.”
Resistance Becomes Support
Just like when climbing any ladder, a tap on the previous rung to confirm support before ascending further. Also, Bitcoin retested the resistance turned support yesternight after it broke out from its second bull flag formation. If a third mini bull flag forms in a row, the price may be ready to rise further.
On the weekly momentum, the bulls are winning after a strong close above $3,800 resistance on Bitifnex on Wednesday. In the case that the upward trend continues, analysts will find new support and resistance targets for Sunday’s Christmas weekly close.