Bitcoin Move May Come Soon Amid Larger Downtrend — Price Analysis

  • Short term trend: Sideways chop, but larger move likely soon
  • Long term trend: Remains down.

Bitcoin (BTC) has been in a vicious chop season for the past week or so, since it broke below its October price range and into price territory from the 2018 bear market. On the technicals, the picture is mixed but mostly down. Low volume suggests the end of a consolidation and a larger move soon.

Still trending downBTC chart by TradingView

We start on the weekly chart, and see that the last weekly candle has managed to close above the October low of $7,470 (Coinbase chart), but still far below the 55 EMA. We note that the 8 EMA looks likely to cross under the 55 during the next trading period, which will be an important bearish indicator if it occurs: It will signal the first tangible sign of the EMA “fan” inverting bearish. Therefore, it will be important to see if and how much this cross is defended by the bulls.

We see that no divergence has been put in on the RSI, with a lower low here matching price. However, the histogram has put in the start of an arch up after an ultimately brief, bearish expansion down. Volume was lower for the week but seems mostly flat in general.

On the daily chart, we see the current trading range is above the important $7,300 and below the 21 EMA. To put it plain, it is anybody’s guess which way level Bitcoin will close beyond first. But two things we can say certainly are that volume is now quite low, which means a larger move is likely soon; and that Bitcoin is still in a broader downtrend.

Clear bounderiesBTC chart by TradingView

The RSI here gives us no clues, basically matching price action, and well below the 50% line. The histogram has started arching down after its pop up.

Finally, it is interesting to note the recent performance of Bitcoin dominance. On the wane from historically lofty levels around 72%, dominance seems to have put in a double bottom at about 67%. On the 3-day chart, the histogram has been recovering from this retreat, and has crossed back into the positive side of the range.

BTC Dominance again climbing?BTC chart by TradingView

This is perhaps surprising overall, given how well a few select altcoins have been performing lately, like MATIC. From the looks of it, we could see another attempt at the 70% area, especially if the 21 EMA holds here.

Bitcoin here is again approaching an important decision point. There has been enough downside during this downtrend to (finally) put in a reversal from the downtrend in play since the summer. But the charts aren't really telegraphing such a move. Before the end of the month, and perhaps the week, we should know if Bitcoin will enter 2020 bullish or bearish.

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