After a 67% gain, Bitcoin shows signs of strong resistance at $5300. A bearish play may occur

8 Apr, 2019 analyst100

Bitcoin appeared to have been resurrected from a bearish zone after following a bullish sentiment for the past two months with a 67% gain. Now facing another rejection level at $5300, a surge could send BTC to the next level. Otherwise, a bearish play may occur. 

BTC/USD Long-term Trend:
Bullish (1D chart)

Key Levels:

Resistance levels: $5600, $600, $6400
Support levels: $4750, $4400, $4250

Before the last week spike, Bitcoin market has been following a slow bullish sentiment since early February and respecting the green trend line. But the recent bull-run was more significant as price established a new 2019 all-time high at around $5300 area. A successful breach above the $5300 resistance level could propel price to another new resistance level at $5600 and beyond.

As suggested on the daily RSI, Bitcoin is now trading at the overbought territory.  In a short period, we should expect a possible correction. A drop is likely to test close key support at $4750 level. Surpassing the mentioned support level could significantly slump price to $4500 and $4250 supports, near the green trend line.

BTC/USD Medium -term Trend:
Bullish (4H Chart)

After struggling to surpass $4200 resistance level for the past two months, Bitcoin saw a surge in volatility to the high of $5000; breaking the tough rejection level. Today, BTC has retested the $5300 level touching the upper triangle trend before it got rejected. The 4-hours RSI is leveled on the 80 line after leaving the overbought zone.

Maintaining a bullish flag pattern, a possible price break is likely to play out for Bitcoin market. The closest support level for a decline lies at $5000, testing the lower triangle trend. Breaking down the above support could send the coin on a medium-term bearish; visiting $4700 support level and beyond. However, a break-up could set a new bull-run at $5500 and above.

Please note: is not a financial advisor and this article should not be treated as financial advice. However, you are welcome to apply this information on our simulated cryptocurrency exchange.

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Azeez Mustapha is a technical analyst, has many years of trading experience in the stock, forex and the crypto markets.

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