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Bitcoin Analysis for 2020-01-02 [Premium Analysis]

2 mins
Updated by Adam James
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Bitcoin Price Highlights

  • The Bitcoin price has fallen to a minor support area near $7150.
  • It is nearing the completion of a head and shoulders pattern.
  • It is facing close resistance from the 100- and 200-hour moving averages (MA).
  • The price is trading inside a short-term descending wedge.

Minor Support for Bitcoin

The Bitcoin price continued its descent to the minor support area, which is found at $7150. The next support areas are found at $6900 and $6650. The 100- and 200-hour MAsare very close to making a bearish cross and are offering very close resistance to the price. If the Bitcoin price were to bounce upward from this minor support, it would be very likely that it would stall once it reached the MAs near $7250. Minor Support It is possible that the Bitcoin price has created a head and shoulders pattern (H&S). However, the pattern is not exactly textbook, mostly because of the differences in duration between the left and right shoulders. A perfectly textbook pattern would have the yellow arrow acting as the right shoulder. So, it is entirely possible that the pattern was invalidated when the price bounced on the minor support area (upward yellow arrow). However, since the technical indicators also give a bearish outlook, we are not rushing to invalidate the bearish H&S. Bitcoin Head and Shoulders

Descending Triangle

In the long-term, the Bitcoin price has possibly created a descending triangle. While the support line has not been validating sufficient times, the descending line is certainly being followed. However, there is a slight bullish possibility. The price has created a long lower wick near the support area at $7150. The two previous times this occurred, on December 16 and 23, the price did not break down from the minor support, rather began an upward move. Bitcoin Descending Triangle. In the short-term, it seems as if BTC has created a descending wedge, which is a bullish pattern. The presence of bullish divergence fits with the long lower wick hypothesis that the price should make an upward move. If so, the move is likely to end near the bearish cross of the 100- and 200-hour MAs. Bitcoin Descending Wedge

Conclusion

The Bitcoin price has possibly completed a head and shoulders pattern, a breakdown from which could take it towards the range lows at $6600. However, a short-term bounce is likely to occur prior. A movement above the 100- and 200-hour MAs would invalidate the H&S possibility. Good luck and happy trading! For our previous analysis, click here.
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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. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

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Valdrin Tahiri
Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona School of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto's Senior Analyst. (I do not have a discord and will not contact you first there. Beware of scammers)
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