Bitcoin Bounces After Threatening Breakdown — Price Analysis

  • Short term trend: The first leg of a new uptrend is in
  • Long term trend: Still down but with reversal potential strong

Largely going sideways in the medium term, Bitcoin (BTC) yesterday threatened to start falling through the entire local structure to lower levels. But this threat has been, for now, contained as moderate buying has come in to support the leading crypto within the recent structure.

We start on the 4-hour for a general view, and see that the very recent support band (blue) was briefly lost and bought back up with a spike in buying. Price has returned to the top of a parallel channel, and back above the EMAs, which is a promising showing of bull support – we should keep an eye out for a break of the channel, which would be a welcome bullish move.

Triangulated bounceBTC chart by TradingView

We can also note that the buying came in just at the golden pocket Fibonacci zone, which may be an encouraging sign of market awareness.

Moving to the daily for a larger picture, we see the leading crypto still safely within important 2019 support, in the first blue band. The RSI strength has been growing and this trend is also safely intact, and price has just now regain the 21 EMA. The 21 EMA has contained price for a while, which has only closed above it once in the last month or so. Holding this average for some length of time could signal reversal.

Daily is strong enoughBTC chart by TradingView

Volume on this timeframe cannot be considered a break from the recent trend. However, this may soon change.

To the hourly for a short term view, we see that the initial surge yesterday was sharply supported at the 0.382 Fibonacci level. This implies bullish sentiment, with such a shallow retracement. The histogram, after having corrected a bit, looks to be setting up for another bullish expansion.

Strong retracementBTC chart by TradingView

Volume is pretty low, though (Bitfinex), which maybe argues against another breakout. $7,400 is containing Bitcoin for now.

We should watch the 21 EMA on the daily, for a solid close above this level and stability in the days to come. Otherwise, this could be a flash in the pan.

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

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