Bitcoin Creates Bullish Hammer Above Crucial Moving Average

Today is the seventh day that the price has been hovering around this level.

Bitcoin Long-Term Support

The main support area for BTC is found at $9,250. The area acted as support throughout most of June before breaking down and validating it as resistance. However, the price broke out once more on July 6 and the area has been acting as support since. While the price is trading in the lower portion of this support, the movement relative to the 50-day MA is bullish. The price has created five long lower-wicks below the MA, the last of them being a bullish hammer. All of these are signs of buying pressure, suggesting that the price will go upwards. However, the daily RSI has been rejected by the 50-line and is in the process of moving downwards—a bearish sign. The signals are conflicting so the direction of the trend is not yet completely clear.

A look at the longer-term chart shows a possible bearish fractal. The decrease beginning on June 23 caused a retracement slightly above the 0.618 Fib level before the price resumed its downward movement. The decrease since July 9 has shown the exact same retracement pattern, so this move could be a smaller fractal of the longer-term decrease. If it plays out, BTC could fall all the way back to the $8,950 support area.

Ascending Channel

The hourly chart shows that the price has been trading inside a parallel ascending channel since June 28. Since parallel lines often contain corrective movements, a breakdown from this pattern would be the most likely scenario. At the time of writing, the price was trading right at the support line of the channel. While it decreased considerably below it yesterday, it has since reclaimed the support line. The 50 and 200-hour MAs have made a bearish cross and the price is trading below both and also validated them as resistance. Since the previous bullish cross between these same MAs marked an uptrend, this bearish cross could indicate that the uptrend is over and the price is now heading downwards towards the previously mentioned $8,950 support area.

For our previous analysis, click here.