At 10:00 p.m. EST Feb. 14, Bitcoin broke up from a bull flag pattern, which Benzinga called out on Sunday, on higher-than-average volume and on Tuesday morning was surging over 4% higher.
Between 2:00 a.m. and 8:00 a.m. on Tuesday, the crypto was forming a bull flag pattern on the hourly chart, which, if recognized, may cause Bitcoin to push even higher intraday.
Bitcoin has been trading in an uptrend since Jan. 24, when the crypto reversed course after hitting a bottom at the $32,933.33 level and looks set to continue higher, although there are a few upcoming events traders and investors should be aware of:
On Wednesday, the Federal Reserve will release its monthly minutes, which will be scoured for additional information on when the central bank plans to introduce its first interest rate hike. St. Louis Federal Reserve President Jim Bullard has become increasingly hawkish in his tone recently, and on Monday he reiterated his call for a full percentage point of interest rate hikes over the next three U.S. central bank policy meetings. Bitcoin and other cryptocurrencies have recently reacted bearishly to hawkish economic policy news.
Furthermore, Friday is the monthly options expiry date for the month, which can bring volatility to the general markets. Bitcoin has recently begun to trade partly in tandem with the SPDR S&P 500 again, after detaching from Ethereum
for much of the past three months.
For technical traders, Bitcoin has clear patterns and points of support and resistance that should provide trade information, despite possible reactions to the key events this week.
The Bitcoin Chart: Bitcoin has made a consistent series of higher highs and higher lows in its uptrend, with the most recent higher low created on Monday at the $41,570 mark and the most recent higher high printed on Feb. 10 at $45,814.61. Bitcoin will need to pop up above that level over the coming days in order to continue in the trend.
If the bull flag which Bitcoin broke up from on Monday evening continues to be recognized the measured move of the pattern, which is calculated by determining the length of the pole as a percentage and adding that number to the lowest price within the flag, is a whopping 25%. This indicates Bitcoin could trade up over the $52,000 level in the near future.
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If Bitcoin makes a larger bull run to the upside, traders will want to watch the cryptos relative strength index, which is measuring in at about 62%. When a stock or crypto’s RSI nears or reaches the 70% level, it becomes overbought, which can be a sell signal for technical traders.
Bitcoin is trading above the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending above the 21-day, both of which are bullish indicators. The crypto has also regained support at the 50-day simple moving average, which indicates longer-term sentiment has turned bullish.
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Bulls want to see sustained big bullish volume continue to drive the crypto up to print a higher high above the Feb. 10 high-of-day, while consolidating sideways between rallies to keep the RSI below 70%. Bitcoin has resistance above at $45,814.61 and $48,475.
Bears want to see big bearish volume come in and knock Bitcoin down below Monday’s low-of-day, which will negate the uptrend and indicate Tuesday’s move higher was a bull trap. Bitcoin has support below at $42,233.66 and $39,600.