Bitcoin seems to have started to show signs that the previous bearish wave may be over as the market has managed to increase by 15% over the past 30 trading days. The market had seen a significant price decline during Q4 2018 where Bitcoin fell by almost 58% from high to low. However, despite this price decline the Bitcoin bulls seem to be around the corner as the buyers attempt to bring Bitcoin back above $4000.
With Q1 2019 almost coming to a close we decided to take a look at the chances of Bitcoin being able to reach the $5000 handle by the end of Q1 2019. Bitcoin will need to rise by a total of 25% during the month of March 2019 to be able to reach the $5000 handle from where it is currently trading at $4000.
The cryptocurrency remains ranked in the top spot as it presently holds a $69.24 billion market cap valuation. The 79 month old cryptocurrency godfather now trades at a price that is 79% lower than the all time high price.
Let us take a look at the BTC/USD market and highlight the key resistance areas Bitcoin will have to overcome before being able to reach $5000 (dashed orange line).
We can see that BTC/USD is now trading at resistance at the $4000 handle as the bulls attempt to break above a bearish .618 FIbonacci Retracement level (drawn in red) priced at $4001.
If the bulls can indeed break above the $4000 handle the nearest resistance above this will be located at the 100 day moving average which currently hovers around the $4100 level. Bitcoin has been unable to sustain itself above the 100 day moving average for a period of more than 5 days since July 2018.
Further resistance above the 100 day moving average is expected at $4125 where lies the bearish .786 Fibonacci Retracement level. This is then followed with resistance at a long term downward sloping trend line, that has been active since February 2018, and then resistance at the bearish .886 Fibonacci Retracement level at $4342.
If the buyers can then battle above these levels of resistance and the $4500 handle, immediate higher resistance above is then located at the long term bearish .382 Fibonacci Retracement level (drawn in blue) priced at $4576. This long term bearish Fibonacci is measured from the November 2018 high to the December 2018 low.
If the buyers can break above the $4576 level and head higher, more resistance before $5000 is then located at the short term 1.414 and 1.618 FIbonacci Extension levels (drawn in pink) priced at $4659 and $4839, respectively.
Conclusion
From the outlined resistance above we can clearly see that Bitcoin will need a significant amount of volume and momentum to be able to tackle all the key resistance areas highlighted. However, if the bulls can break above $4000 and above the most significant resistance at the .382 Fibonacci Retracement (drawn in blue) priced at $4576 then the market has a very strong chance to reach $5000 by the end of Q1 2019.
