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Bitcoin Breaks Clean Above Key Levels, Now What? — Price Analysis

researchsnappy by researchsnappy
January 7, 2020
in Healthcare Research
0
Bitcoin Breaks Clean Above Key Levels, Now What? — Price Analysis
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Bitcoin (BTC) yesterday broke out of its local market structure, and remains solid in a new uptrend per the indicators. This move is auspicious, as it marks the first concrete step in a potential long term reversal from the downtrend which has been in play for six months.

On the 4-hour chart, we can see that, after breaking two important downtrend lines, BTC has now broken free of the approximate top of the November-December market structure. This move has come with building buy volume, which speaks well to the chance of continuation. Both the RSI and histogram on this chart are showing higher highs with the move (not shown), which is also a good sign.

Break ALL the levelsBTC chart by TradingView

Of course, we are likely to see a retest of this level of some kind. The depth of the retracement should give us further insight as to the strength of this move.

Moving to the hourly for some detailed forensics, we see that price is so far being supported above the 21 EMA, also at the 0.382 retracement level. If this were to be the bottom of the retracement, we could consider the uptrend still very bullish. The 0.618-65 area (the “golden pocket”) is sitting just under the important $7,700 area discussed above, which gives Bitcoin a healthy and safe berth for correcting while preserving an uptrend.

Waiting for retracementBTC chart by TradingView


The RSI has already cooled off nicely on this timeframe, after carving deep into overbought territory, giving Bitcoin room to move up again. The histogram has been contracting bearish with a mostly flat direction, although we can see a very faint arc coming in.

We go now briefly to the weekly chart, to get a sense of the consequence of this move. Generally, we see Bitcoin moving in a downtrending parallel channel. The EMA fan, before inverting dangerously and signaling a possible new bear market, is now slowly being reclaimed and pushed back up: another week or so of this price action and we’ll see the 8 recross above the 55.

The bigger pictureBTC chart by TradingView

The 21 EMA looms slightly above, at $8,135, and will be the first major hurdle of a continued uptrend. The top of this channel is at about $8,500-800, and that will be the major test of this uptrend if it can get there. Only a breach of that level will give us a confirmation that the downtrend, in play since July, has concluded. This is the significance of the last few days’ price action.

The views and opinions expressed here do not reflect those of CryptoGlobe.com and do not constitute financial advice. Always do your own research.

Featured Image Credit: Photo via Pixabay.com

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