Early in the morning today (UTC time), Bitcoin (BTC) filled in the last few hundred dollars that made up the gap between price and the ultimate make-or-break moment in early 2020. As we have lately outlined in this space, the leading crypto has been trending toward the top of a downtrending channel; this channel has been in play since July 2019, and there is now a clear chance for Bitcoin to break the channel and leave the downtrend as 2020 gets rolling.
We start on the 4-hour to see the modest breakout, which has closed the last gap up to the important resistance around $8,600. This breakout narrowly overtook the previous price high from 8 Jan. In the current configuration, the RSI is showing a clear bear divergence; this presents something of a predicament for Bitcoin, in that it must break higher out of the larger structure if it wants to avoid the effects of this bear divergence.
Turning to the daily chart, we see that Bitcoin is generally right at the downtrending resistance, around $8,500 (depending on how one draws this chart). Here, strength is not overbought on the RSI, which gives the crypto a nice runway to climb higher.
Volume for the day, still early in the day, has already outstripped the last two days’ volume. This is a good start, and might encourage the rest of the market to pile in.
Moving to the weekly, we see the situation and the consequences that will likely stick in the coming days. If Bitcoin is rejected here, like it was in October, we are likely to see a steep selloff that will see a drop toward the bottom of the channel. A rejection here will almost certainly result in months of further downtrending and price loss.
On the weekly histogram, we see a strong suggestion for a break above the line. Last week, this indicator painted a sharp acceleration in a bullish contraction up, which certainly suggests very strong momentum building to the upside. This smooth acceleration is translating into a recovering EMA configuration, and the 8 EMA has just today crossed back over the 55.
It’s do-or-die time for Bitcoin, but things are looking good. It is hard to ignore bullish weekly indicators, as it is generally very hard to move the needle at all on the weekly chart. There is a good chance of a breakout and conclusion of the downtrend.
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