The Bitcoin market had been grappling with numerous macro headwinds, from the tightening of Fed policy expected in March, and fears of a potential conflict escalation in Ukraine
However, tensions between Ukraine and Russia have eased, confirming our hypothesis from last week regarding the formation of a reverse SHS. Take a closer look at the technical situation of the most popular cryptocurrency.
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On a weekly interval, we can see that the exit by the bottom of the cloud was invalidated during the 3rd week of January. Bitcoin prices have been moving through the cloud step by step before hitting resistance - the EMA 50. A break of this resistance would allow for a breakout from the top of the cloud, and thus an ichimoku signal. This signal will be confirmed once prices have crossed the kijun (blue line) at around $51,500. Such a breakout would allow the lagging span to cross its final hurdle - Japanese candlesticks (yellow box).
It is also important to note that the RSI is currently testing the 50 area which could be a strong resistance.
BITCOIN, W1 interval, Source : xStation5
On a daily basis, prices have managed to form the right shoulder of the inverted Shoulder-head-shoulder pattern discussed last week. Prices are currently hovering around the neckline of this pattern. If the neckline is broken, it would strengthen the bullish outlook as the chartist pattern would be confirmed. In other words, a break of the resistance at $45,500 would open the door for further upside towards the psychological level at $50,000. The theoretical target for the inverted SHS can be found at $54,000.
BITCOIN, D1 interval, Source : xStation5
Reda Aboutika, XTB France
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