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Bitcoin’s Short-Term Move Could Determine Its Long-Term Trend

2 mins
Updated by Ryan Smith
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In Brief

  • The Bitcoin price has broken out from a descending resistance line, but has yet to reclaim the previous support.
  • There is a strong support area at $9,450 while there is heavy resistance all the way to $10,100.
  • The price is following a long-term rising support line.
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The Bitcoin price bounced at the $9,450 support area on June 7 and has been increasing since. While the price is trading inside a resistance area, an increase above would likely trigger a rapid move upwards.

Current Support

The Bitcoin price has been following a rising support line from June 2 but broke down a few days later on June 5. The next day, the price returned to validate it as resistance before dropping sharply. However, once the price reached the $9450 support area, it quickly reversed trend and initiated a strong upward move, breaking out from the falling resistance line in place since the June 1 high (dashed line) by creating a bullish engulfing candlestick. The breakout occurred with significant volume, and the price reclaimed the 200-hour moving average (MA). Therefore, the price may continue rising and soon reclaim the previous support line.
BTC Price Movement
BTC Chart By Tradingview
Cryptocurrency trader @Scottmelker saw an identical setup, which he used as an exit signal:
Right back at resistance – that line was the support where I exited my last long. Let’s see what happens next.
BTC Price Movement
Source: Twitter

Future Movement

Despite the previous rally, BTC has still created a lower high relative to the June 4 increase, which touched the 0.5 Fib level. There are two scenarios for price movements here:
  1. The bullish one, which seems more likely, would have the price increase towards the next resistance levels at $9,950 and $10,110, the 0.618 and 0.765 Fib levels, respectively. A rise above the latter (red line) would likely mean that the correction is over, and the price is heading towards new highs.
  2. The bearish one will take place if the price declines below the $9,450 area. This would likely cause a very rapid drop that brings the price well below $9,000 – in line with BeInCrypto‘s previous Wyckoff Distribution analysis.
Bitcoin Fib levels
BTC Chart By Tradingview
The fundamental reason here is that the $9,450 support area coincides with the long-term ascending support line that has been in place since March 13. If that line is broken, BTC is likely to show major signs of weakness. On the other hand, the $9,950 and $10,100 areas were the highs of May 6 and May 11, respectively. The price is likely to reverse if/once it gets there, however, a breakout above would likely mean that the correction is complete, and BTC will head higher. While there is considerable long-term resistance at $10,400, there is also a higher likelihood of a breakout this time round. Resistance and support areas become weaker with each additional test.
Bitcoin Long-Term
BTC Chart By Tradingview
To conclude, the direction of Bitcoin’s long-term trend is still uncertain. A rally above $10,100 would indicate that the trend is bullish, while a decline below $9,450 would almost certainly be bearish.
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Disclaimer

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. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

Valdrin-Tahiri.jpg
Valdrin Tahiri
Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona School of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto's Senior Analyst. (I do not have a discord and will not contact you first there. Beware of scammers)
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