Story by: Omkar Godbole
- With 63 percent month-to-date gains, BTC looks set to register its longest monthly winning run since August 2017.
- The falling channel breakout seen on the monthly chart favors a rally to key Fibonacci resistance of $9,442.
- BTC has pulled back from one-year highs hit earlier this week. The cryptocurrency, however, remains on the hunt for a near-term move above $9,000, as the daily chart pennant breakout confirmed on Sunday is still valid.
- The short-term bullish case would weaken if the price drops below $8,000.
Bitcoin (BTC) is on track to register its longest winning streak since August 2017, with four consecutive months of price gains.
The cryptocurrency is currently trading at $8,670 on Bitstamp, representing 63 percent gains on the opening price of $5,267 seen on May 1.
The bulls usually take a breather after engineering such stellar gains, and a healthy correction may be seen over the next two days.
However, a drop all the way back to the monthly opening price of $5,267 before Friday’s UTC close looks unlikely, as both the short-term and long-term technical studies are biased bullish.
For instance, BTC is currently witnessing strongest buying pressure since December according to the weekly chart money flow index.
Further, the cryptocurrency is trading well above the 200-day moving average (MA) – a widely tracked barometer of the long-term trend. The average, currently located at $4,544, is beginning to curl upwardsin favor of the bulls for the first time in over 12 months.
So BTC looks set to end in the green for the fourth straight month, having rallied 11, 8 and 28.6 percent in February, March and April, respectively. The run marks the longest monthly winning streak since August 2017, as seen in the chart below.
- Bitcoin’s price was solidly bid in the five months to August 2017. A minor blip in September was followed by a three-month rally to a record high of $20,000
- The cryptocurrency jumped 11 percent in February this year, snapping its record six-month losing run
- If prices remain near $8,600 till Friday’s UTC close, then the resulting monthly gain would be the highest since August 2017.
Bitcoin’s price has risen sharply this month, validating the falling channel breakout confirmed on April 30.
The 5-month MA is rising, indicating a bullish setup and looks set to cross above the neutral (flat) 10-month MA on June 1. That bullish crossover would strengthen the long-term bullish view put forward by last month’s channel breakout.
The cryptocurrency, therefore, could extend the ongoing rally toward $9,442 – the 38.2 percent Fibonacci retracement of the drop from the December 2017 high to the December 2018 low.
The long-term bullish view would be aborted only if the price finds acceptance below $6,000, although that looks unlikely.
Despite the pullback from the 12-month high of $8,940 hit on Monday, the outlook remains bullish, as the pennant breakout – a bullish continuation pattern – is still valid.
Further, the price is holding above the former resistance-turned-support levels of $8,500 (June 2018 high) and $8,390 (May 16 high).
Adding to those, the 5- and 10-day moving averages (MAs) are trending north, indicating a bullish setup, and the Chaikin money flow index is signaling strong buying pressure with a positive print.
Prices, therefore, could rise above $9,000 over the next few days. The short-term bullish case would weaken if the ongoing correction is extended to levels below $8,000.