The Bitcoin price is attempting to create a higher low in order to solidify the possible uptrend in place since November 25. However, there is strong resistance above the current price.
The current bullish short-term pattern along with technical readings suggests that the price will breakout and attempt to reach higher highs.
Technical analyst and creator of the “Waves and particles” trading system Mitoshi Kaku stated that the Bitcoin price could make a higher low and continue moving upward beginning today. Therefore, he has already opened a long trade near $7200.
I shared this chart yesterday on the group. But today coming back from a few days off I was hesitant and cautious to open the long, but 7195 (WP Level) held really good, I longed 7200. Today is a pivot day on the 1D. Let’s see if $BTC has legs! 🤓 pic.twitter.com/OV6bYSPxvr
— Joe Mitoshi 🧑🚀 (@CryptoSays) December 2, 2019
Is this a good level to initiate a trade? If so, why? Continue reading below if you are interested in finding out.
Descending Channel
On November 25, the price bounced on the support line of the descending channel it has been trading in. It has been increasing since. It is also slightly above the support area between $7000-$7200, which the price is trying to validate as support for the future.
The bullish divergence in both the RSI & the MACD suggests that the price will move upward towards the resistance area.
Possible Bitcoin Breakout
In the short-term, the price is trading inside a descending wedge. It has reached a convergence of support, created by the support line, previous support area, and the 0.5 fib level.
The support area looks strong and likely to hold. However, a breakdown would possibly take the price to the next fib level of support at $6850. This would cause it to break down below the significant support area outlined in the previous section and greatly reduce the chances of making a higher low.
Technical indicators in the short-term also predict an increase.
A bullish divergence can be observed in both the RSI & MACD. But, the price has fallen below the 200-hour moving average (MA), which should be reclaimed after a breakout in case the price wants to move upward.
To conclude, the Bitcoin price is at a pivotal moment. The short-term outlook suggests a price increase. But, there is strong resistance ahead.
If the price does not initiate an upward move soon, we could be in a longer-term downtrend.
Other cryptocurrencies, like ATOM, may be poised for a breakout as well.
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.
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