Backed By Volume, Bitcoin’s Eyes $4.4K Price Target
The world’s largest cryptocurrency by market capitalization had been trapped within a symmetrical triangle, suppressing its range between $3,788 and $4,153 over a period of four days, that is, until it broke out above $4,200 at 12:40 UTC today.
At press time, bitcoin is up more than $100 on the day, having climbed to $4,128, up from $4,007 at the start of the day’s trading. However, traders could have a pathway for moving the price to a key Fibonacci extension at $4,441, which would further bolster the move above $4,000 on Dec. 20.
In drawing attention to the 4-hour chart we see how the Chaikin Money Flow (CMF) and Chaikin Oscillator (CO) turned bullish yesterday at 22:00 UTC, signaling a possible confirmation of bitcoin’s recent move back above $4,000.
Price action briefly halted along the primary Fibonacci extension point at around $4,159 before continuing a slow incline according to CoinBase data and has been presented with an opportunity to continue its momentum to $4,440, post-consolidation.
Volume for the period has also shot up substantially, with the move being backed by the largest injection since Dec. 20.
Evidence of the move can also be found on the weekly chart, where the price of bitcoin has risen above the Nov. 26 closing price at $4,103, emboldening the bulls to push higher on the week as the new session begins today.
But the weekly has demonstrated a potential turnaround, with a large bullish candle accompanied by growing volume.
Here’s what we see ahead:
- Bitcoin has pushed above an ascending triangle breakout (continuation pattern) to the primary Fibonacci extension line, with accompanying volume.
- The 4-hour chart has turned bullish on the CMF and OC and needs to clock higher highs in order to see a continuation in bullish price action.
- Likely to consolidate before pushing to $4,440 as traders engage in a short-term sell-off.
- The weekly chart shows a recovery bounce by the bulls has tipped the scales and we may be looking at a reversal of the primary bearish trend.
- A break below $3,650 (Dec. 20 major swing low-swing high) would invalidate the bullish bias.
Disclosure: The author holds no cryptocurrency assets at the time of writing.