Bitcoin Analysis for 2019-12-25 [Premium Analysis]

Bitcoin Price Highlights

• The Bitcoin price is trading inside a minor support area
• It has validated the previous descending resistance line.
• It will possibly create another upward leg towards $7800.
• The weekly outlook is neutral — leaning on bullish.

Minor Bitcoin Support

After failing to reach the resistance area at $7800, the Bitcoin price has been decreasing. It has reached the minor support area at $7200, at the point where it converges with the previous descending resistance line. There, it has created two candlesticks with long lower wicks, indicating buying pressure. The next support areas are found at $6900 and $6650. The price would have to break down below the descending resistance line in order to reach them. Looking at the price movement since the December 17 bottom, it is possible that the Bitcoin price just finished the fourth wave of a five-wave Elliott formation, with the ensuing fifth wave likely to take it towards the resistance area at $7800. However, the formation is irregular, mostly stemming from the fact that the fourth wave is breaching the high of the first one. Since it is a relatively short-term occurrence, it might not be important.

Weekly Outlook

The weekly chart gives us the most important resistance area that has to be broken for the price movement to be considered bullish. It is found at $7400-$7600. Also, its borders are strengthened by the 50- and 100-week moving averages (MA) — which are acting as resistance and support, respectively. There are long wicks on both sides, but the bullish hammer candlestick created during the previous week tilts the momentum towards the bulls. Additionally, the daily outlook favors the bulls. The double bottom near $6500 combined with the strong bullish divergence makes it more likely that the Bitcoin price will eventually break out above this resistance area and head towards the resistance line of the long-term channel near $9000. To conclude, the Bitcoin price has found support above $7200 and is consolidating. We believe a move towards $7800 will eventually occur, but cannot be sure whether it will be successful in breaking out above this area. Good luck and happy trading! For our previous analysis, click here.