Bitcoin Analysis for 2020-01-27 [Premium Analysis]

Bitcoin Price Highlights

• The Bitcoin price initiated an upward move at a low of $8,300.
• Long-term weekly moving averages (MA) have made a bullish cross.
• There is minor resistance at $8,800 and major resistance at $9,400.
• There is minor support at $8,300 and major support at $7,600.

Bitcoin Weekly Outlook

The weekly candlestick for last week was a small hammer, which comes after two bullish engulfing candlesticks. This does not have any major indications about the future of price movement. The 50 and 100-week MAs have made a bullish cross and the price is clearly above them. The 50-week MA is moving upward at an accelerated pace and possibly providing support to the price. While the exact resistance line that the price had been following since June 24, 2019, is unclear, it seems like the price has broken out above a descending resistance line, and is currently very close to the resistance area of $9,400. The closest support area is at $7,600, coinciding with the 100-week MA.

Daily Outlook

The price has been decreasing since Janu 19 but bounced at $8,300, which is the 0.382 fib level of the entire upward move and previously acted as a resistance. The fib retracement has been slightly adjusted using the exact high instead of the daily closing prices in order to reflect this recent bounce. The price is trading between the 100 and 200-day MAs, so until it breaks out or down away from them, we can assume that the price will consolidate between them without experiencing much volatility.

Future Movement

There are two possible outlines for the direction of future movement.

1. The price is following a curved ascending line, on which the price just bounced and which suggests that the upward trend will continue.
2. This is the B-wave in an A-B-C correction, the final wave of which could take us to $8,000. Afterward, the upward trend should continue.

The 12-hour RSI is above 50, after briefly trading below this level. It has been above 50 almost the entire time of this upward trend. Unless the RSI breaks down below 50 combined with a strong breakdown from the curved ascending support line, the first option looks more likely. To conclude, the Bitcoin price initiated a bounce at the $8,300 level. This upward movement will likely continue and the price should be targetting $9,000 and above. A breakdown below the ascending support line combined with a RSI decrease below 50 would invalidate this possibility.