Fear continues to gain space, financial markets find no ground. Even gold continues to seek new support. In the case of the Bitcoin price, $ 4,000 has been a good support, but there is still the risk of another sharp drop. Here we present a technical analysis of the subject.
Bitcoin price technical analysis
Following the impending crypto market crash, BTC managed to get support to curb the bearish force. In summary it can be said that the price of Bitcoin is consolidated.
The range in which it is located has drawn a very clean symmetrical triangle, a chartist formation that indicates continuation of the trend.
At this time, the odds support another downward momentum. However, the bulls are trying to take momentary control.
To try to identify the most likely scenario, let’s go over the BTCUSD chart across the different time frames.
From the weekly chart, the situation is not so pessimistic. After very low prices were reached, strong rejections of minimum levels are witnessed.
Despite this, the structure remains bearish, as a result of the continuous formation of ever lower highs.
If the price tries to go back further, it would only be the search for a new downward structural point. For this reason, we can ensure that the bear market remains for a good number of days.
The EMA of 8 and SMA of 18 support the sequence of descending maxima. The recent episode of extreme volatility experienced by the crypto market caused the bearish crossover of these two moving averages.
The 200 SMA demonstrates its strength and continues to be respected. The candles with long wicks were not able to break it, causing it to remain bullish today.
The daily candle time frame remains bearish. A clear succession of ever lower highs can be observed.
Immediate resistance is at $ 5,700, and must be broken if others want to drive the price into a further pullback. If it does not, the current consolidation will be necessary to validate a new lower maximum.
The moving averages EMA of 8 and SMA of 18 support the downward trend observed in this time frame. Currently, the EMA of 8 is working as a dynamic resistance.
The 200-day SMA is also bearish, and currently quite far from the price.
The RSI supports the downward trend. During these days of consolidation, this indicator managed to recover after reaching the oversold level, but has not yet managed to move into bullish territory.
Are we in a position to affirm that the price of Bitcoin is consolidating?
On the 4-hour chart conditions have started to be bullish. Bulls attempt to break the top of the symmetrical triangle.
The RSI has entered buyers territory, being above the 50 level.
The EMA of 8 and SMA of 18 have crossed to the upside and have functioned as mobile supports.
The 200-period SMA is still bearish and could function as a moving resistance if the price manages to pull back towards $ 7,750.
Currently, a small bullish structure can be observed. The bulls are trying to validate a break in the resistance of the formation.
As I was saying, the symmetric triangle is a trend continuation formation.
There is still a small resistance at $ 6,000, where enough pressure could be exerted to cause a false bullish break in the figure.
If the bears manage to resume the trend, the formation forecasts a drop to $ 2,900.
At the moment, within the 4-hour time frame, the conditions are in place for a reversal to open up to at least USD 6,500, in case this is not a strong resistance, the second target is USD 7,750.
Just as I write this post, the bullish break signal could try to be effective. If it does not, the higher trend will continue to drag the price towards new supports.
What do you think, the price of Bitcoin consolidates in the short term?
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