Alright, so check it out—Bitcoin is and always will be the top dog in the crypto game. Its rarity, security, decentralization, transparency, and worldwide recognition as a value haven make it a rock-solid foundation in today’s crypto scene. Now, if you’re up for it, let’s dive into the nitty-gritty of Bitcoin’s technical analysis chart. Ready for the ride?
Bitcoin Chart and Trend analysis
This chart follows an underlying bullish trend, and in the short term, we have begun to see a continuation of the short-term bullish trend that has propelled Bitcoin to all-time highs. Could this be a new stage for the cryptocurrency?
Right now, the price of Bitcoin is at $58,600, which represents an increase of more than 270% from the lows of late 2022. An incredible rise for this year, right? What do you think is happening?
If we switch to the weekly chart, you’ll see that the price has continued an upward trend since the beginning of the year, creating higher highs and higher lows. However, in recent months, it has remained in a sideways phase between the key levels of 70,000 and 60,000.
The most likely scenario now would be for it to remain sideways in that range for a bit longer and gain more strength to continue upward.
Bitcoin technical and trend analysis
For the technical analysis of Bitcoin, it’s crucial to be adept at reading charts and understanding their context, such as chart trends, entry and exit patterns, support and resistance levels, and more. That’s why we’re going to delve into all the technical indicators displayed on today’s Bitcoin chart.
1- Support and resistance
The difference between support and resistance is minimal: they are essentially the same. The only distinction is that supports are positioned below the price, and resistances are above. Where are the levels situated on this Bitcoin chart?
As you can see, Bitcoin was in a downtrend, and the $17,000 zone helped to slow it down a bit. After breaking that support, it made a fakeout, returning inside, to start the short-term uptrend we currently have.
This entire uptrend it has been building has allowed buyers to push strongly and break through the psychological barrier of $70,000.
Now, after breaking December’s highs, the trend has continued upward. Due to various factors, including news of BlackRock’s ETF launch and the recent halving event a few days ago, Bitcoin has surged to resistance around 70,000 with significant demand. It pierced through this zone and experienced a rejection, keeping the price below resistance within a large accumulation area.
2- Where to enter and where to exit
Nailing your entry, exit, or even the stop-loss isn’t a walk in the park. If you were thinking of manually exiting the trade, you might as well forget about it; it won’t do you any good. Knowing when to enter a trading operation is crucial, but it’s even more vital to exit correctly. So, here we go. Let’s pinpoint our key points:
You should consider what type of investor you are. If you want to buy for the long term (holder), you would wait for support zones to accumulate positions. You wouldn’t mind the price oscillating as much. However, if you enjoy trading (swing trader), you should be clear about where to place your entry, stop loss, and risk.
In both cases, you can take advantage of the opportunities provided by the two key points I’ve marked on the chart for the following:
- If you’re a holder, you might consider using the area around $52,000 or $60,000 USD to accumulate more BTC, which would be ideal if the price finds support there again. Alternatively, you could wait for it to return to the $50,000 to $45,000 USD levels. As you know, anything can happen in crypto, so while less likely, the price could revisit the $17,000 USD zone.
- Another option is to try catching swings with trading. Move between the support and resistance zones, or vice versa. Here, you could wait for a bounce from $60,000 USD to the next resistance at $70,000 USD, or even higher targets like $80,000 and $90,000 USD, which are Fibonacci projection levels calculated from the last impulse (where the price is more likely to halt).
3- Weekly Average
As of today, we can (and should) adjust our technical indicators to ensure their helpfulness. Even if the weekly moving average is not perfectly configured, it won’t lead us into major disasters. In any case, we’ve configured it to make significant differences in terms of accuracy and usefulness. The blue line indicates bullish moments, while the red one depicts bearish ones. Let’s see what happens in this case.
The weekly average has been bullish (blue) for over 8 months, indicating we’re still in a short-term bullish trend. Currently, there isn’t significant price-value tension, so the price should bounce back a bit, find support, and then resume its upward momentum strongly. Do you see it clearly? What decision would you make?
4- Divergences
When a divergence occurs, something is fishy, something is off because the price and something inferred from the price don’t match. If you want to learn how to read an indicator when looking for divergences, click here. Now, let’s start by identifying those contradictions between the price movement and a technical indicator on the bitcoin chart.
MACD
There are few occasions when significant MACD divergences appear on weekly charts. However, when they do, caution is warranted as significant changes are on the horizon. Let’s analyze the bitcoin chart. What do you notice at first glance? Share your insights. 😉
The price continues within the sideways zone we discussed earlier, and the indicator is starting to decline, which is not aligning with these new highs. We could be seeing a bearish divergence. Remember, this doesn’t necessarily mean the price will drop immediately, but it suggests that upward momentum might be weakening.
RSI
The RSI moves between 0 to 100 and indicates whether the price is expensive or cheap. Two scenarios can occur:
- The price is very high, leading to overbought conditions (levels above 70).
- The price falls below 30 (oversold or very low).
The RSI on this chart indicates that the price is high and overbought, while the price continues to rise. Currently, the price is in a sideways zone, but the RSI has started to slow down, showing weakness and a bearish divergence. Remember that the RSI, as an oscillator, tends to behave this way in strong trends and often signals a possible divergence early on.
Triangles
Technical analysis with cryptocurrencies involves various patterns, and one of them is triangles. There are different types such as the ascending triangle, descending triangle, and symmetrical triangle. Which one is present in the Bitcoin chart?
As of now, we don’t see any triangle formations, and the price continues to experience a strong upward movement with minimal pauses.
4- Volatility
Volatility is often a sign that the price is accelerating in a certain direction. To gauge the current volatility of Bitcoin, let’s examine the Japanese candlesticks. Remember, interpreting candlesticks in trading is a matter of common sense.
The larger candles represent rapid price movements, while the smaller ones indicate quieter zones.
In the daily chart, I’ve marked (ORANGE rectangles) the recent periods of high volatility for Bitcoin. As you can see, volatility has started to decrease in recent weeks. Strong hands have sold off somewhat, as evidenced by strong red candles, which, while not causing significant drops, have halted upward movement during the sideways trend.
The interesting observation comes from the current zone. There have been several days of upward volatility followed by a day of decline. This could indicate that strong hands are pushing the price up but also selling part of their holdings. This pattern could be a clear indicator of accumulation to sustain the upward trend.
Bitcoin Forecast
Trading Bitcoin
As you already know, trading with Bitcoin is a delicate matter. Buying and selling, capitalizing on price changes, is not a game. You need to educate yourself to do it effectively and profitably. Everything else will only lead you to waste time and money. Do you really want that? Life is to be enjoyed day by day as if it were the last, don’t you think?
Don’t procrastinate. If you want to learn how to do it right, practice with us, and remember to store Bitcoin in the world’s safest wallet, Material Bitcoin. 😎 And, of course, don’t forget to keep an eye on the Bitcoin chart with us. The more you practice, the better you’ll get. But don’t buy just because the price reaches support; always wait for confirmation.
If you have doubts or questions, join our Telegram channel!
For more in-depth analysis, check out our technical analysis of Ethereum.
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