As we see Bitcoin trading higher today, we must wonder, “Is there more to come?” Bitcoin has been largely flat for several weeks now, but three significant bumps in price over the past two days may point to an incoming bullish scenario for BTC, along with other indicators both technical and fundamental.
Technical Reasons for BTC to Trade Higher
First off, the hourly chart seen over the past few days shows a series of very clear bull flag patterns playing out in textbook fashion. The first happened early on Tuesday when the price shot from a low of $9195 to a high of $9374. Then, prices price action consolidated in the upper half of that range for two days, building up pressure. The next bullish formation came at the end of the following day taking prices from just over $9400 to nearly $9600 in under an hour. Then, just as it had the day previous, price action consolidated sideways for almost 24 hours before making another big run up to just shy of the $9700 mark.
As far as technical data goes as seen on the hourly chart, there are several elements suggesting higher prices, as well as a couple that are not.
The obvious bull flags are interesting, and one could go so far as to assume that the current flag will fire to the upside as the others have done. However, without considering the other indicators it makes it hard to make that case based on patterns alone.
The first place to look is the RSI. Currently (at the time of writing), the Relative Strength Index is sitting at the top of its range. There is a bit of headroom for it still, but BTC is beginning to edge its way into oversold territory on the hourly chart. That generally means that there will be more consolidation or even a pullback before heading higher again.
Another place to look are the moving averages. Since Tuesday’s jump in price, BTC has been comfortably above the 200 MA which is a bullish sign. The 13-period MA has also crossed over the 30-period MA and has remained above it which is also a sign of bullish momentum and price action.
Other Reasons Supporting Higher Trading Prices
Apart from garden variety chart analytics, there are a few other important places to look for clues as to whether Bitcoin will be trading at higher prices in days to come.
The first is volatility. For more than three weeks, there has been much less volatility than what Bitcoin is used to. A recent breakout of the Bollinger bands suggests that we are now entering a more volatile stage and should expect larger price swings.
Another reason to pay attention to the recent move in price is the increased institutional interest in Bitcoin. In the past couple of days, Bitcoin derivatives such as options contracts and futures positions have risen by nearly 25%.
It may be possible that the wait is now over for Bitcoin’s ascent to new highs. When and how fast it will happen remains to be seen but there are several reasons to think that it will happen sooner than later. As more and more traders, investors, and institutional money begins to flow back into the exchanges, it is worth taking note so as to avoid FOMO’ing into whatever lies ahead.