Bitcoin trading: Price prediction and technical analysis 5 April 2019
Bullish signals flashed in February, and were borne out. The next target is from $5,700 to $6,000.
After some success midway through 2018, trading the inverted head and shoulders pattern shown on the chart below, I remained on the sidelines with a neutral view of Bitcoin until 6 weeks ago.
At that point our attention returned to Bitcoin as we highlighted a potentially bullish technical analysis based view of Bitcoin to our TECHFX TRADERS subscribers.
The essence of the bullish view was that the Bitcoin daily chart displayed a rounded bottom pattern, a distinct loss of downside momentum, as well as bullish divergence as viewed on the Relative Strength Indicator. The weekly chart confirmed that at its low of US$3,122, last December, Bitcoin held the critical support coming from the 200-week moving average. Based on this analysis, we made a bullish call on Bitcoin back in late February 2019 when it was trading at $3,925.
This week, after Bitcoin's one day stunning 20% rally, the first profit target of the trade at $4,650 has been reached where I have taken partial profit on the original position. I remain core long, looking to take profit again should Bitcoin reach the next layer of strong technical resistance which is situated between $5,700 and $6,000. I intend to keep a final 1/3 portion of the original long Bitcoin trade for a move towards $8,000.
The stop loss on the trade has now been moved higher to $4,050, so I am protected should Bitcoin fail to build on this week's rally.
We also highlighted the late February's bullish view of Bitcoin in a video recorded for City Index earlier in the week. You can skip to the relevant section of the video which starts at 8 minutes and 40 seconds into the video.
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