Bitcoin Analysis for 2020-02-07 [Premium Analysis]

Bitcoin Price Highlights

• The Bitcoin price has broken out above a significant resistance area.
• There is support at $9550.
• It has possibly created a short-term head and shoulders pattern.
• The short-term RSI supports a price decrease.

Short-Term Breakout

On February 6, the Bitcoin price broke out above the significant resistance area of $9550 — something it has been struggling to do since January 30. Afterward, the price validated the area as support twice. The second time, it took the form of a long lower wick that revealed the immense buying pressure near this area, which is now likely to act as support. Since the breakout, the Bitcoin price movement has created what resembles a head and shoulders, which is considered a bearish reversal pattern. A breakdown from this pattern would once more take the price to the support area. This movement is supported by the hourly RSI, which has generated bearish divergence and successfully completed a failure swing top — indicating that the price wants to move downwards.

Daily Time-Frame

In the daily time-frame, we can see that yesterday’s price close of $9744 was clearly above the resistance area and higher than any close since September 2019. However, the Bitcoin price has created upper wicks for the second consecutive candle. The same thing occurred in October and the price decreased sharply afterwards. Therefore, the price has begun to show its first signs of weakness — which, however, are not sufficient in predicting a reversal. After the short-term decrease previously discussed, which would validate the now parabolic support line once more, a bounce is expected followed by a rapid increase towards $11,000. The Bitcoin price has broken out above a significant resistance area and validated it as support. After a short-term price decrease, we believe the price will continue its upward movement and eventually reach $11,000. For those interested in BeInCrypto’s previous Bitcoin analysis, click here.