Bitcoin Price Analysis: This BTC/USD Breakout has Legs Staying Above $5,300
- Bitcoin extending the gains above $5,300 has helped to improve the short-term technical picture.
- Bitcoin has a bullish outlook not only for the short-term but also the long-term.
BTC/USD is trading at $5,312 following a 3% rise from this time on Tuesday. The largest cryptocurrency by market capitalization reversed the trend yesterday above a very strong resistance zone at $5,200. The breakout saw Bitcoin increase its value to enter the bullish zone it had formed at the beginning of last week.
In spite of the correction, BTC/USD value has thinned by over 4% in the last seven days, however, extending the gains above $5,300 has helped to improve the short-term technical picture as well as curb the bearish pressure that had dominated the market since the selloff on Thursday last week.
Bitcoin price short-term technical outlook – 1-hour chart
Thursday’s breakdown saw Bitcoin slide to the key support at $5,000. This move was sudden and did not give the bulls enough time to adjust their positions. However, a reversal occurred where Bitcoin reclaimed the support at $5,100 and later stepped above $5,200. Unfortunately, the price remained below both the 100 simple moving average (SMA) 1-hour and the longer term 200 SMA 1-hour. This meant that the bear pressure had not entirely been purged forcing Bitcoin into a narrow range between $5,100 – $5,200.
For five days the price was ranging in the narrow range above until the buyers got back in line yesterday. We saw an impressive move past the descending trendline resistance and the 100 SMA 1-hour. Further correction catapulted BTC/USD above the range resistance at $5,200, in turn, opening the door for gains above the 200 SMA. Bitcoin also stepped above $5,300 cementing the bullish momentum even more. The price hit weekly highs at $5,342 before starting to retrace to the current price at $5,312.
Meanwhile, the Relative Strength Index (RSI) in the same 1-hour range has started moving horizontally around the 70.00 level. The trend of the RSI suggests that Bitcoin likely path of correction is sideways in the short-term. The price is also likely to stay above $5,300 especially if the ascending channel support is defended.
Despite Bitcoin being in a bullish zone, influence by the bears is still present as the 100 SMA struggles below the longer term 100 SMA. In terms of support, Bitcoin’s initial support is seen at $5,300. Second support is observed at the former resistance range between $5,100 and $5,200. If a reversal occurs below this level, Bitcoin next support targets are $5,000 and $4,950.
BTC/USD daily chart
Looking at the daily chart, Bitcoin has a bullish outlook not only for the short-term but also the long-term. The trend in this range is still strongly bullish within a rising channel. Besides Bitcoin is trading above both the 100-day SMA and the 200-day SMA. $5,000 is the main support while the SMAs will function as key support levels in case of extreme declines below $4,500. It is essential to note that Bitcoin is strongly supported within a short-term bullish channel at $5,000 – $5,300. The next target on the upside is $5,400, although all eyes are set on $5,600 just below 2019 highs around $5,646.76 (on Coinbase).