The pair is being supported by the 25-day and 50-day moving averages, which is a bullish sign. At the same time, the Relative Strength Index (RSI) is nearing the overbought level of 70.
Bullish view
- Buy the BTC/USD pair and set a take-profit at 26,000.
- Add a stop-loss at 24,200.
- Timeline: 1 day.
Bearish view
- Set a sell-stop at 24,240 and a take-profit at 23,000.
- Add a stop-loss at 26,00.
Bitcoin (BTC/USD) price has stalled after it made a strong bullish breakout during the weekend. The pair hovered slightly below Sunday’s high of 25,350, the highest point in a few months. It has surged by more than 50% from its lowest point this year, meaning it has outperformed key assets like the Nasdaq 100 index and gold.
Bitcoin daily chart analysis
Bitcoin has made a strong bullish breakout in the past few weeks. As it rose, Bitcoin crossed the important resistance point at $21,547, the highest level on November 5. It then made a break and retest pattern by moving retesting the previous resistance, which is now the support. In most cases, a break and retest pattern is usually a bullish sign.
The BTC/USD pair then made a crossover above the important resistance level at 24,251, the highest level in February. This is a signal that buyers are getting in control. However, instead of maintaining its bullish trend, the pair consolidated because of the psychological importance of 25,000.
The pair is being supported by the 25-day and 50-day moving averages, which is a bullish sign. At the same time, the Relative Strength Index (RSI) is nearing the overbought level of 70. There is a likelihood that the BTC/USD pair will have a bullish breakout, with the next resistance point to watch being at 26,000.
The bullish view will be invalidated if the pair manages to move below the support at 21,547, which was the highest point on November 4. Such a move will send signals that there are still more sellers keen to push the pair below 20,000.
BTC/USD analysis (4H chart)
On the 4H chart, the pair remained in a tight range slightly below the key resistance at 25,000. It is also lower than the key point at 25,212. Bitcoin remains above the key level at 24,238 and the 25-period and 50-period moving averages. The RSI has moved sideways slightly below the overbought level. Before the bullish breakout, the pair had formed a cup and handle pattern.
It has formed a small ascending triangle pattern. Therefore, the pair will likely have a bullish breakout before or after the upcoming FOMC minutes. If this happens, the next psychological level to watch will be at 26,000.
The main thing to watch on Tuesday will be the performance of the US dollar index. Historically, Bitcoin has an inverse relationship with the USD. As such, it will likely react mildly to the upcoming US existing home sales numbers.