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Bitcoin technical analysis: Bears have control


After a bitcoin upside rally of almost 2 months, sellers have managed to take the wheel; causing a loss of more than 17% of said increase.

The force that bears possess on the current market causes fear; and suggests that all the bullish expectation that occurred could be eliminated in its entirety.

However, fundamental factors such as the coming halving, the unstable world economic situation and the health problems caused by the coronavirus, indicate that an exponential revaluation of Bitcoin is imminent.

There is no doubt that there is a good chance that the crypto market continued to fall over the next few days; but by opening the vision in a panoramic way, bears could be quickly driven away.

To better understand the current situation, let’s perform a Bitcoin price analysis, from a macro temporality such as the weekly, to the intraday chart with 4-hour candles.

Weekly temporary

From the time frame with weekly candles, the scenario is daunting; after observing the strong candle that is in development, capable of wrapping several previous weeks.

Observing the closing of the current weekly candle will be key to forecasting the future development of Bitcoin in the short term.

It is still possible that this candle closes making a strong bearish rejection, and end up being a positive signal.

While if it manages to close with the force it currently carries, we are more likely to see the continuation of the current feeling, in the search for important supports.

The loss we observe today began just when Bitcoin managed to reach the resistance left by the price, when it made the maximum of October 2019, located at USD 10,350.

Usually, investors use the resistance zones to take profits, so added to the absence of new buyers, product of high prices, causes situations like the current one.

Bitcoin technical analysis, weekly temporality.
Bitcoin technical analysis, weekly temporality

The technical indicators in this time frame remain bullish

The EMA of 8 and SMA of 18 are currently bullish, and may function as mobile media in the midst of the fall in price; if not respected, we will see an intensification of sales.

Meanwhile, the 200-week SMA is also bullish, and is quite far from the current price, supporting the Bitcoin historical positive trend.

Moving averages on the weekly Bitcoin chart
Moving averages on the weekly Bitcoin chart

The RSI in the weekly temporality is currently bullish; but it is very close to level 50, so the continuation of sales, would cause the weekly RSI to move to bearish territory.

RSI on the weekly Bitcoin price chart
RSI on the weekly Bitcoin price chart

Daily temporary

In the chart with daily candles we continue to see a bearish scenario for the short term.

Today’s candle tries to close with much body below the support located at USD 9,150, while that of yesterday managed to close below USD 9,550, indicating that an effective breakdown of the daily bullish structure, which is kept for almost 60 days has been broken.

Bitcoin price technical analysis
Bitcoin price technical analysis

Moving averages support this negative scenario. The EMA of 8 and SMA of 18 remain crossed downward, currently quite far from the price, so a pullback should begin very soon.

The 200-day SMA, broken up on January 28, is currently being reached. This moving average should work as an important mobile support.

If a setback does not begin in the next few hours, the SMA of 200 will be broken, which would be a rather negative signal for the price of Bitcoin.

Moving averages on the daily Bitcoin chart
Moving averages on the daily Bitcoin chart

The RSI has entered bearish territory, after crossing level 50 in recent hours.

RSI on the daily Bitcoin price chart
RSI on the daily Bitcoin price chart

Technical analysis of the price of Bitcoin in the 4 hour timeframe

The current bearish sentiment is quite clear, if we look at it from this time frame, thanks to a clear succession of increasingly low highs.

The fall of Bitcoin towards USD 8,650 is the result of the search for a new lower low, of the bearish succession observed.

As we mentioned in previous paragraphs, it is quite probable that the price seeks to make a setback in the next few hours; Broken resistance zones could be searched.

Bitcoin technical analysis from intraday timing
Bitcoin technical analysis from intraday timing

The EMA of 8 and SMA of 18 moving averages support the current bearish structure and trend; the same sentiment shows the 200-period SMA, after being broken down, when the bears were able to move the price below the important support located at USD 9,550.

Moving averages on the Bitcoin 4-hour chart
Moving averages on the Bitcoin 4-hour chart

The RSI remains in bearish territory, due to its location; thus supporting the bearish signals for the short term that can be observed in other indicators and temporalities.

RSI on the 4-hour chart of Bitcoin vs US Dollar
RSI on the 4-hour chart of Bitcoin vs US Dollar

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

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Creative editor and trader of cryptocurrencies, fiat currencies and commodities.

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