Bitcoin Uptrend Approaches Critical Historical Resistance: Short Term Analysis

After breaking first through $10,000 and then $11,000 over the weekend, Bitcoin (BTC) has found some resistance just above $11k, and will soon test an important historical resistance under $12k.

Looking at the weekly chart, we can see the origin of this resistance, located between $11,200-11,800. This area marked support on the way down from $20,000, and tough resistance trying to rebound from the brutal 2018 dip to $6,000.

current resistance rooted in 2018 price history(source: TradingView.com)

This area now looms ahead of any further Bitcoin price action to the upside, although it has not yet been specifically tested (although Bitcoin already is probably in this general area of resistance).

Zooming far in to the 4 hour chart, we get a feel for Bitcoin today. Admittedly, the leading crypto is looking rather toppy here, with an RSI picture of lower highs and lows in a downtrending channel; and a price that has diverged dangerously from the moving averages.

bitcoin could break up soon - or get smacked down(source: TradingView.com)

Bitcoin will have to break out of this RSI channel soon - which will mean attempting the grey block of resistance again. From there, the important Feb/March 2018 resistance zone can begin to be tested at $11,500 - if we get there.

But even if Bitcoin can look tired now on the charts, chart analysis has become less helpful in the current parabolic price action: new inflows of buying may simply ignore the indicators, as they have done for weeks.

Looking closer in on the hourly chart, we see a still more muddled picture. We see falling RSI strength with generally neutral price, and falling volume excepting some big sell blocks - not too encouraging. However, the price is easily holding the 55 hour EMA (pink), and the pattern looks again like a consolidating bullish pennant - suggesting at least an attempt up.

some lower lows on hourly rsi(source: TradingView.com)

Pulling all this together, we should anticipate another attempt at $11,000. If that breaks, our next area of attention should be on $11,500 - where the critical block of resistance waits to be tested. Then we will know if Bitcoin is, for now, out of steam.

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