It’s been a fairly exciting week for Bitcoin bulls, with rally upon rally feeding into the bullish sentiment. Although the weekly is not closed as of typing, Bitcoin saw its value jump 14% this week to $9169,5(Bitfinex). However, it seems that for all the gains achieved this week, Bitcoin has found itself staring at a significant high-time frame resistance zone on the weekly and daily charts.
Bitcoin Weekly Analysis
To understand where we might be going, let’s break down where we’ve been in weekly chart retrospective review. After an explosive first half on 2019, the second half of 2019 saw bitcoin’s price establish a series of entrenched bearish market structure; Lower lows and lower highs. This trend continued till mid December 2019, where after a period of consolidation and a fake-out to the downside, bitcoin managed to break its weekly pennant, push past prior lows of 7700 and then over 40% from the lows at $6477.
However, technically speaking, bitcoin has yet to firmly establish a break in larger bearish structure, and has still not made a higher high or higher low in this price range. Although the bulls have delivered a healthy dose of humble pie to bears this season, price is at significant high time-frame resistance, where hibernating bears have begun to wake up and even lure traders into a bull trap. The similarities to the 2018 bear market are eerily similar. However, something to keep in mind is the RSI indicator is about to close above the 50 midpoint, which in the past signalled a high probability of bullish continuation.
Bitcoin Daily Analysis
The daily is a perfect chart to view to establish one’s bias. On the one hand, we have both a bullish break of a descending wedge/channel; and yet on the other hand we have a simple retest of prior support that has now become resistance (Red Box).
Although it currently looks like the bulls have been caught with their pants down, if they manage to reclaim $8500-$8400 as support (which they currently seem to be doing-Green box)) it could simply be bullish consolidation at a new upper range from which to retest $9000 and eventually print higher highs. However, if bitcoin has truly exhausted its bullishness, and $9000 does hold as resistance, we could drift down to $7700 and test support once again to recharge. The daily RSI has been trending downwards since July 2019, and although RSI is approaching “overbought” zones, the larger RSI trend on the daily is still bullish as long as RSI remains above the midpoint at 50 on any retrace.
The 4H chart is essentially telling the same story as the daily chart—we hit high-time frame resistance and had a strong bearish reaction off of it into a healthy support zone.
If price maintains bullish structure and does not venture below $8400, there’s a strong possibility price will retest the highs and eventually delve into the mid $9000’s range—where I expect a lot of volatility. If bears take charge, price could see $7700, which would, in this authors opinion, be a golden longing zone.
Recap and Conclusion
There’s no denying that on a weekly time frame, the prevailing trend since July 2019 has shifted. This was jump-started by price faking out to new lows. A few weeks later, bitcoin price is retesting old support turned resistance. Now, it’s time to be cautiously optimistic about bullish prices in the coming weeks, provided we manage to clear the lower $9000 and not lose $7700 as support. This $8400-9000 zone is a significant piece of price the bears and bulls are fighting over, and the winner will likely set the trend for the coming months into the halvening.
Where do you think Bitcoin price is heading this week? Add your thoughts in the comment section below!
Images via Shutterstock, BTC/USD chart by Tradingview