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Bitcoin price consolidates, the risk of another fall is still there

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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.

Symmetrical triangle observed on the 4-hour chart of the Bitcoin price.

To try to identify the most likely scenario, let’s go over the BTCUSD chart across the different time frames.

Weekly seasonality

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.

BTC USD weekly chart technical analysis
BTCUSD weekly chart technical analysis

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.

Technical analysis - moving averages on the weekly chart of Bitcoin
Moving averages on the weekly chart of Bitcoin.

Daily seasonality

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.

Technical Analysis - Daily Bitcoin Price Chart
Bitcoin daily price chart.

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.

Technical Analysis - Moving Averages on Daily Bitcoin Chart
Moving averages on the daily chart of Bitcoin.

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?

Technical Analysis - RSI on Daily Bitcoin Price Chart
RSI on daily Bitcoin price chart.

Intraday temporality

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.

Technical Analysis - RSI on the 4-hour chart
RSI on the 4-hour chart.

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.

Bitcoin price technical analysis, 4-hour chart.
Bitcoin price technical analysis, 4-hour chart.

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.

Technical analysis - Forecast of the symmetric triangle chartist figure.
Chartist Symmetric Triangle Chart Forecast.

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?

All our publications are informative, so in no case should they be adhered to as investment advice.



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