Bitcoin Price Highlights
- The Bitcoin price broke out from a descending wedge.
- It’s facing resistance from hourly moving averages.
- There is support at $7,200 and $6,900.
- The short-term outlook is neutral-bearish.
Bitcoin Breaks PatternThe Bitcoin price had been trading inside a descending wedge since Nov 27. After reaching the 0.5 fib level support near $7,200, the price began to increase and eventually broke out from the wedge. However, the breakout transpired with almost non-existent volume, indicating weakness and suggesting that the price will likely revisit the 0.5 fib support around $7,100 in the near future. There is a bullish divergence trend in the RSI which is still intact. However, the price has fallen below both the 100 and 200-hour moving averages (MA). In order to initiate an upward move, it has to flip them as support in the near future. The weak breakout, however, suggests that Bitcoin still has some room to go down. It would not be surprising to see another lower-low near the descending support line while the bullish divergence trend stays intact. A double bottom at $7,200 would present a slightly more bullish scenario. The more bearish outlook has BTC broken down from an ascending support line and validated as resistance. In this scenario, the price would continue moving downward until reaching one of the support areas outlined below, found at $7,200 and $6,900.
Significant SupportThe daily chart better shows the significance of this support area. While the price fell slightly below it, it immediately reclaimed the area as support. The presence of wicks gives it more strength, since many positions near $7,000 are getting taken. If Bitcoin were to decrease below this area, it would likely make another low near the descending support line. This has bearish implications since there is almost no support from a previous trading range until $6,000. To conclude, while Bitcoin has attempted to begin upward moves in the short-term, they were unsuccessful. It looks as if the strength of the bulls is exhausted, and the price might make a slightly lower-low before attempting another upward move. For our previous analysis, click here.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.