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Bitcoin Signaling a Potential Double Bottom

Bitcoin has been declining since failing to clear the 300 handle at the beginning of March. As we wind down the month, we find the cryprocurrency testing the 235-236 area as support. As the 1H chart shows, price has failed to break this area twice. As we began the week, we saw a sharp rebound from the 236 area. Price is climbing back above the 100-, and 50-hour simple moving averages, which show loss of the prevailing bearish bias. The RSI is about to clear 60, which would reflect loss of the prevailing bearish momentum.

Bitcoin (BTCUSD) 1H chart 3/31

(click to enlarge)

The price action in the 1H chart shows a promising double bottom as bears lose control from the technical perspective. It would still require a break above 256 to complete the price bottom, but a break above 252 could be an early sign as that would clear the 200-hour SMA and a previous support/resistance pivot within the consolidation since last week (this consolidation range is now being interpreted as a pending double bottom).

If price does break above 256, and pulls back, a bullish market should keep price above 250, or at least the 245 central pivot of the double bottom. A break below 245 would invalidate the bullish breakout.

If the bullish breakout is in play, we can projection a rally of about 20 above 256, which targets the 276 area. We can be a bit conservative and expect resistance in the previous resistance around 270-272.

Bitcoin (BTCUSD) 4H Chart 3/31

(click to enlarge)

In the 4H chart, we can see that around 270-272, price will also be challenged by a falling trendline coming down from March’s high a tad above 300. A break above 272 and this trendline would indicate a bullish reversal against March’s decline and at least put pressure on 300, and possibly the 2015-high around 321. Look for the 4H RSI to break above 60 as an additional sign that the bearish momentum is loss. If price holds under 272 and the RSI holds under 60, we should still respect the bearish momentum of this market.