On May 21, the Bitcoin price decreased considerably and created a bearish engulfing candlestick in the process.However, the price has bounced at a likely reversal level and has possibly begun a retracement.
Golden CrossThe Bitcoin price has been following an ascending support line since the March 13 bottom. However, the exact slope of the line is not yet confirmed. Yesterday, the price created a bearish engulfing candlestick which created a small lower-wick once it reached the ascending support line, indicative of a possible bounce. However, the $8,550 level is a confluence of stronger support levels, more specifically the ascending support line, the $8,550 horizontal support, and the 50-day moving average (MA), which has just made a bullish cross with the 200-day MA.
Short-Term Bitcoin MovementIn the short-term, we can also see that the price is trading inside a minor support level at $9,000. However, it has lost the support of the 25-day MA. The decrease seems valid since it occurred with significant volume. BTC looks likely to either re-test the $9,400 level and confirm it as resistance, or immediately drop to the $8,550 area, as outlined in the previous section. The hourly chart makes it look likely that the price is ready to begin a retracement. First, it bounced on the 0.618 Fib level of the entire upward move, a very common reversal level. Also, this bounce was combined with an extremely oversold value in the RSI. The last time this occurred, the price initiated a significant upward move. Finally, BTC has already broken out above a very short-term descending resistance line, a sign that the price is likely to move upwards, with the first resistance level being found at $9,250. Afterward, the price is expected to continue its downward movement towards $8,600. To conclude, the Bitcoin price has reached a minor support level and initiated a bounce. While the price is likely to increase initially, it is expected to eventually resume its downward movement towards $8,600. For those interested in BeInCrypto’s previous Bitcoin analysis, click here.
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.