Bitcoin’s Modest Downtrend Unlikely to Tumble Hard — Price Analysis

  • LTF (Low timeframe) trend: Down for now
  • MTF trend: Uptrend still intact for now, but that may change quickly
  • HTF trend: Up

Bitcoin (BTC) has begun a slight retracement, after its predictable rejection at the regional high of $10,200 came and went. The LTF trend has shifted down, and the potential exists for the MTF to follow it with a longer correction or consolidation – but as of yet, we do not see this playing out.

We begin on the 4-hour, and first see that Bitcoin is already rolling back up on the histogram. The leading crypto is just now entering its first support candidate-zone, between $9,800-9,500. If BTC is held here, we may see another extension of the MTF uptrend and a break through the regional high (from October 25, shown); if not, the MTF could switch down.

Will it hold in the gold?BTC chart by TradingView

$9,500 is the floor of this level because it is the breakout level of the most recent LTF rally, and is thus the limit of the LTF market structure. We can reasonably expect a retest there, as it is a good place for a LTF reversal back up.

Down further, to the 2-hour, things are looking placid. There doesn’t seem to be much interest in selling, and the histogram is in fact diverging bullish. The RSI is not diverging bullish here, but it is on the hourly (not shown).

Not much selling interestBTC chart by TradingView

So things are looking okay for the bullish case of a continued MTF uptrend, but we would like to see how Bitcoin engages with the inflection zone at about $9,600-500, as mentioned above.

Finishing on the daily chart, we see a mix of signs that might signal a MTF downtrend. The histogram is starting to show smaller hills, as the EMAs are left a bit too far in the dust. In addition, volume has ebbed slightly throughout the MTF uptrend, perhaps signaling a need for consolidation.

Despite strength, MTF is at the limitBTC chart by TradingView

On the other hand, the daily RSI did not flag at all and continued to put in higher highs throughout the uptrend. This important showing of strength may suggest that any corrections will be brief.

To review, we see a LTF downtrend that may turn into a MTF downtrend. But the case is compelling that it won’t; and either way, the HTF uptrend is nowhere being threatened, nor is it likely to be. Bitcoin’s rise now, unlike in October-November, has been far more organic, which makes the new uptrend more likely to stick.

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