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Security lapses exploited by hackers cost the exchange a loss of about 7,070 Bitcoin (BTC).
The price of Bitcoin continued to soar higher even in the face of this event, as it did not deter speculative adoption. The price surge brings to mind that serious-minded investors can distinguish between the Bitcoin blockchain and the exchange’s wallets/storages.
Crypto traders and investors interpreted this as a fear of being wrong by naysayers and forced the price of Bitcoin above the round number of $8000.
Below, we deploy the Relative strength index to spot the points where the Bitcoin price enters the overbought or oversold territory, and when it exits overbought or oversold territory.
Combining this RSI setup with price action patterns, we get timely and profitable entry and exit points.
BTCUSD: Monthly Chart
Starting with the monthly time frame, you’ll notice a break of the RSI above the level-50 from below.
The BTC price continued to rise from that point till the RSI again breaks into the overbought territory by closing above the RSI level-70 from below, which implies an increase in buying pressure; hence the trend should continue.
This RSI close above level-70 resulted in a 1705.50% increase in the Bitcoin price.
The RSI closed below level-70 from above on 01 March ’18 confirming an end to the crypto rush of 2017. Traders utilized this setup as an indication of taking profit from long positions.
An opportunity to enter a short-selling position was signaled by selling pressure on 01 October ’18, forcing the price to collapse by about 48.0% from the double accumulation price pattern.
BTCUSD: Weekly Chart
Notice the break out of RSI level-30 on 17 December ‘18, an indication of the BTC coming out of the oversold region from a weekly chart perspective.
Further on to 01 April ’19, the RSI again breaks above the level-50 confirming an increase in buying pressure.
BTCUSD: Daily Chart
From above, we see how the Bitcoin price transitions from a bearish trend into a bullish trend. The BTCUSD entered the oversold region as the RSI crossed below the level-30 in combination with triple consecutive bearish accumulation on 14 November ’18.
The pair exited from the oversold region by a close above the RSI level-30, as well as signaling a regular bullish divergence on 17 December ’18.
A bullish accumulation setup was signaled on the same date forming support at 3215.2.
The bulls stopped to take profit on 24 February, 11 April, and the more recent one on 17 May ’19.
Major Resistance Levels of Bitcoin (BTC)
19891, 16000, 12000
Major Support Levels of Bitcoin (BTC)
3215.2, 3405.3, 3767.0
Conclusion and Projection
From the earlier monthly chart analysis, the Relative strength index indicator crossed above the level-50 and in combination with a break above bearish accumulation resistance of $4384.0 on 01 April ’19 with support at $3215.2. This confirms the bullish hidden divergence setup as the RSI forms a lower low compared to the low of 01 October ’15.
On 06 May ’19, the pair goes ahead to close above the RSI level-70, entering the overbought region. A close of the RSI below level-70 from above it will confirm an exit from the overbought region and potential take profit for buyers.
This article is written by Cryptocointrade. Cryptocointrade is a great free source for crypto trading information. You can find articles about crypto trading bots, crypto trading strategies, crypto trading on social media and compare crypto trading platforms. In addition, there are always updated technical analysis and fundamental analysis on great cryptocurrencies.
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