Bitcoin (BTC) scaled an important price resistance with double-digit gains in April, solidifying the long-term bull breakout witnessed four-weeks ago.
The crypto market leader closed (UTC) at $5,269 on Tuesday, representing a 28 percent gain on the April 1 opening price of $4,092, as per Bitstamp data. That’s the biggest monthly gain since April 2018, as discussed yesterday.
Importantly, April’s close put prices above the 21-month exponential moving average (EMA), currently at $5,248.
That EMA had emerged as a strong price floor in the five months to October 2018, forcing many to conclude that the bear market had ended near $6,000. Bitcoin, however, dived below $6,000 on Nov. 14 – falling to lows near $3,100 by mid-December – and, with that, the 21-month EMA became the level to beat for the bulls.
Now that BTC has secured a monthly close above that key hurdle, the long-term bearish-to-bullish trend change confirmed on April 2 looks more credible. As a result, a rally to $6,000 in the next few weeks cannot be ruled out.
As of writing, BTC is changing hands at $5,300 on Bitstamp – up 2.4 percent on a 24-hour basis.
Monthly chart
As seen on above left, April’s candle closed just above the 21-month EMA, the first monthly close above the key average since October 2018.
The bullish close comes four weeks after bitcoin first confirmed long-term bullish reversal by violating the most basic of all bearish patterns – the lower highs and lower lows – with a high-volume break above $4,236 on April 2.
The chart also shows a falling channel breakout, which indicates a bearish-to-bullish trend change. It is worth noting that a similar bearish channel breakout in October 2015 was followed by a 2.5-year bull market (see above right).
Essentially, BTC has activated twin bullish cues – a falling channel breakout and a close above the 21-month EMA – with April’s close at $5,269. These developments are remarkably similar to the ones seen in October 2015.
Daily chart
The above chart shows bitcoin has again bounced up from the 30-day moving average (MA), weakening the case for a deeper pullback put forward by the bearish divergence on the 14-day relative strength index (RSI).
It is worth noting that BTC has suffered significant price pullbacks following the confirmation of the bearish RSI divergence in the past.
This time, however, the pattern seems to have failed, with the price bouncing up from the 30-day MA, a sign of strong bullish sentiment. As a result, BTC could revisit and possibly breach the recent high of $5,627 reached on April 23.
The case for a temporary pullback to the 50-day MA, currently at $4,706 would strengthen if and when the price closes below the 30-day MA at $5,184.
Source: Coindesk
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