What Does Bitcoin’s Bullish Weekly Close Indicate for the Future?

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In Brief
  • The Bitcoin price has reached a weekly close above a significant resistance level.

  • The price has broken out above its previous range.

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During the week of April 13-20, the Bitcoin (BTC) price reached a weekly close of $7120. This was the highest weekly close since the rapid decrease on March 12.

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Weekly Outlook

In the weekly time-frame, the Bitcoin price has finally reached a close above the $6900 area — something it had been unsuccessfully trying to do for the past four weeks. However, it still has not cleared the entire wick resistance from these weeks.

The next closest resistance level is found at $7600. At the moment, the price was trading inside a strong resistance area, found between $6900-$7600.

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There is a pronounced lack of resistance/support above/below these areas. Therefore, whenever the price leaves this area, whether that is in the form of a breakout or a breakdown, it could trigger a rapid movement in either direction. As long as the price is trading inside this area, both possibilities remain.

Bitcoin Chart By Trading View

Trading Range

A lower time-frame chart shows that the Bitcoin price has already broken down from an ascending wedge and validated it as resistance afterward. In addition, it gives us a trading range, between $5700-$6900.

Once the price broke down from the wedge, it re-entered the range, implying that it is heading towards the range low. However, on April 16, it reversed the trend and created a bullish engulfing candlestick, breaking out above the resistance area.

One indicator which gives a slightly bearish scenario is the Bollinger Band. The price has twice moved above the upper band and reversed afterward. At the time of writing, it was in the process of doing so once more, a movement that could indicate the price will fall back inside the range once more.

Furthermore, the volume has been consistently decreasing since the beginning of the wedge and was not significant enough during the April 16 breakout.

Bitcoin Chart By Trading View

Short-Term Movement

In the short-term, the price is trading inside an ascending channel and has flipped the $7120 area as support. Combining this with the longer-term analysis, the most likely scenario seems to be continued trading inside this channel followed by an eventual breakdown.

Bitcoin Chart By Trading View

To conclude, the Bitcoin price has reached a bullish close above an important resistance level, but it has yet to clear the entirety of its overhead resistance. The previous breakdown from its pattern and lack of volume in the reversal makes it more likely that the price will eventually get rejected and initiate a downward move.

For those interested in BeInCrypto’s previous Bitcoin analysis, click here.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
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Valdrin is a cryptocurrency enthusiast and financial trader. After obtaining a masters degree in Financial Markets at the Barcelona Graduate School of Economics he began working at the Ministry of Economic Development in his native country of Kosovo. In 2019, he decided to focus full-time on cryptocurrencies and trading.

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