The price just broke out of the descending wedge after previously being rejected four times by the resistance line. The breakout was preceded by bullish divergence in the RSI and price is moving upward to the next area of resistance at $3610-$3670.
- The current daily candle is a bullish engulfing candle.
- Daily indicators are undecided
- Price is in the process of attempting to break past the 7-day moving average for the fourth time.
- The closest support area is found at $3240-$3320.
- The closest resistance area is found at $3610-$3670.
- Price just broke out of the descending wedge.
Bitcoin Price Analysis: BTC/USD 24 hr Chart
A look at the Daily chart shows that the price of BTC has retraced all the way to the 0.88 fib line of the entire upward move ($3273 to 4175) and is currently trading at $3500. A break below this area would put in action the double bottom scenario in which price retraces all the way to the most significant support area at $3240-$3320. Price has made three unsuccessful attempts at breaking through the 7-period moving average and is currently on the process of attempting to break through it for the 4th time. Furthermore, the 7 and 21 period MAs have made a bearish cross. The price is currently trading below all the moving averages and the Ichimoku Cloud, giving us a bearish outlook. However, there is a portion of the cloud that is positive and lasts until February 12, possibly allowing price to break through. The retracement started after the double top on January 7th and is currently on day 32.
As for the rest of the indicators, after making a bullish cross 7 days earlier, the MACD seemed to lose power, however, it just rejected a bearish cross and started another move upward. The RSI is at 43, indicating neither oversold nor overbought conditions and does not show any significant divergence of any kind.
Bitcoin Price Analysis: BTC/USD 2 hr Chart
A look at the 2-hour chart gives us a structure of price movements. The BTC/USD price was trading in a descending wedge (bullish pattern) for the past 20 days, and today it broke out. The breakout happened on a significant but not immense amount of volume. However, the breakout was preceded by significant bullish divergence in the RSI, which is now going up strongly. The closest significant resistance area is found at $3600-$3650, while there is another minor resistance at $3550. It is also possible that the price falls to validate the resistance line before starting an upward move.
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]