Bitcoin [BTC] Price Analysis: Price Broke Down From The Ascending Support Line, What Is Next?

Bitcoin Price Analysis

Bitcoin [BTC] Price Analysis: Price Broke Down From The Ascending Support Line, What Is Next?

The price of BTC/USD traded at $4225 on February 24th, before generating bearish divergence in the medium-term and breaking down. It initially found support on the ascending support line that had been in place for 22 days, but the bounce was not successful and the price has finally broken down below it. Price has found support above the $3800 support area which coincides with the long-term moving average.

Key Highlights:

  • There is major resistance near $4400.
  • Price broke down from the support line in place for 22 days.
  • There are minor support areas near $3800 and $ 3700.
  • Price has made three short-term double tops, followed by a sharp drop.

Bitcoin Price Analysis – BTC/USD – 2 Hours Chart

Bitcoin Price Analysis
Chart Source: TradingView, Bitdinex

A look at the 2-hour chart shows us that after touching $4250, the price fell sharply, creating a bearish candle on significant volume. The breakdown was preceded by bearish divergence in both the RSI and the MACD, the former being in overbought territory. After the drop, the price fell all the way to the ascending support line that had been in place for roughly 22 days. However, the bounce was not substantial and the price has finally broken down below the support line. It is currently trading at $3895, slightly above the support area near $3800. We can see from the long lower wicks that there is substantial buying power in that area. Furthermore, the volume of bearish candles has been decreasing constantly, but it is still higher than that on bullish candles.

As for the indicators, the price has found support above the 200-period (long-term) moving average but is trading slightly below the 21 and 50-period MAs, which are getting ready to make a bearish cross. The RSI is at 45, almost in oversold conditions but there is no divergence developing yet. Finally, the MACD has fallen back into negative territory after trading above 0 for a short period.

BTC/USD – Price Analysis – 15 Minutes Chart 

Bitcoin Price Analysis
Chart Source: TradingView, Bitfinex

A look at the 15-minutes chart shows that after the drop, the price has been struggling to break above the 0.382 fib line which is at $3980, even though it has been trying for the past 5 days and 22 hours. There is significant resistance at $4000, formed by previous support and the 0.5 fib line. Price has not been following a support line, and recently broke down below the support area near $3880. However, there is significant support near $3825, where price has effectively made a triple bottom (bullish reversal pattern). We can see that there is significant buying power there due to the long lower wick. We can see that one repetitive pattern has been the creation of the double top combined with a bearish divergence in the RSI, succeeded by a sharp drop. This has occurred three times so far.

Summary
Bitcoin Price Analysis: Price Broke Down From The Ascending Support Line, What Is Next?
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Bitcoin Price Analysis: Price Broke Down From The Ascending Support Line, What Is Next?
Description
The price of BTC/USD traded at $4225 on February 24th, before generating bearish divergence in the medium-term and breaking down. It initially found support on the ascending support line that had been in place for 22 days, but the bounce was not successful and the price has finally broken down below it. Price has found support above the $3800 support area which coincides with the long-term moving average.
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Author: Valdrin Tahiri
Valdrin is an eager trader, cryptocurrency enthusiast, and freelance writer. He specializes in technical analysis, indicators and charting guides. Reach out to him at [email protected]
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Valdrin Tahiri 33 Articles
Valdrin is an eager trader, cryptocurrency enthusiast, and freelance writer. He specializes in technical analysis, indicators and charting guides. Reach out to him at [email protected]