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Bitcoin is currently showing bullish divergence on both the 4 hours and daily timeframe. This bullish divergence is a great indicator that tells me Bitcoin might just be getting ready to make a massive breakout soon.
In this Bitcoin analysis, I will be pointing out exactly what I am watching, my entry criteria, my targets, and important support regions I am keeping an eye on to support my bullish bias.
Bitcoin Testing The $12,000 Resistance Again. Breakout Now?
Since the flash crash that occurred earlier this month, Bitcoin as been finding it difficult to make a higher high. This as been a result of the super-strong weakly resistance at the $11,500/$12,000 price region.
I was able to predict these weekly resistance days before it came into play and I cautioned my readers about it in an analysis titled “Is This A Bull Trap? Bitcoin Just Hit Weekly Resistance. What Next?”
Well, Bitcoin as tested that resistance about three times now and it is showing signs that it might just be ready to finally break through it and resume the uptrend.
The Hidden Bullish Divergence. How Does It Work?
The Hidden bullish divergence can be seen clearly from both the 4 hours and daily timeframe. While the Bitcoin price is trending higher, the indicator is trending lower.
This gives us hints that we might see a massive bullish move coming soon. It also tells us that more and more buyers might already be stepping into this Bitcoin trade and looking to ride that price breakout.
My Entry Criteria For This Coming Bullish Move
My entry criteria for this trade is a price break and close above the $12,000 region on the 4 hours timeframe.
The close above the resistance confirms the start of the bullish move, and we can expect to see the Bitcoin price continue to head higher in the coming days.
I will also be watching to see a spike in the bullish volume. This volume indicator helps me confirm that bullish traders are entering the market and committing to this move higher.
Price Targets For The Breakout
My profit target for this bullish breakout is the $13,000 price region. And I believe there is a high probability we might get to this target in just a few days after the bullish breakout.
However, if the price fails to break through the $12,000 weekly resistance, there is a high likelihood we might see more weakness come into Bitcoin and a price retracement in the coming days.
The support level I will be watching for the Bitcoin price to retrace to is the base channel of the ascending triangle. This base channel as served as a strong support region for the Bitcoin price on numerous occasions in the past.
This price fail of the $12,000 resistance will also lead to further sideways trading, low volatility and contracting volume in the coming days before Bitcoin decides to finally breakout.
To gain more information on how to partake in this coming Bitcoin Bull run and trade this cryptocurrency, you can read my How To Trade Bitcoin Guide. You can also check my top list of Best Bitcoin Exchanges To Trade With.
