- The price made a double top at $4200 and retraced.
- It made three unsuccessful attempts to break above the 7-day moving average.
- Price broke down through the minor $3600 support area which now acts as resistance.
The price is trading in a short-term descending wedge, a breakout from which would put into play the resistance areas at $3600, $3900 and the previous top at $4200.
Short-Term Outlook – BTC/USD 6Hr Chart
Finally, a look at the 6-Hour chart gives us two possible trading structures for the price of Bitcoin. We can see that after reaching the $4300-$4400 resistance area, price initiated a retracement. Price is trading in a possible descending wedge, with the solid green line acting as support. For the resistance, there are two possible lines which have not been validated yet. In the first scenario (purple dashed line), we have broken out of the descending wedge and are close to the $3600-$3700 resistance area. I believe this to be less likely since the breakout was done on minuscule volume. The second scenario (red dashed line) we are still trading in a descending wedge which ends on February 11.
Medium-Term Outlook – BTC/USD 3 Days Chart
A look at the 3-Day chart gives more information about price movements. Preceding the recent upward move the price developed bullish divergence in the RSI. Price is currently trading below the 7, 21, 50, 200 period MAs and the Ichimoku cloud, while facing very close resistance from the 7-period MA.
However, the MACD has made a bullish cross and is heading upward, albeit with decreasing strength.
A look at the Daily chart shows that price has retraced to the 0.786 fib line of the whole upward move ($3273 to 4175). The retracement has been going on for 20 days, starting on December 15th and after making a double top on January 7th, it is now trading at $3500. Price is facing very close resistance from the 7-period MA, which made a bearish cross on January 23rd.
However, there is a part of the projected cloud which is positive, possible allowing the price to break out.
Long-Term Outlook – BTC/USD 3 Days Chart
A look at the Weekly chart for Bitcoin in logarithmic form shows that price has found support at the 200-period moving average (white line) which coincides with the $2700-$3300 area of support, formed by the May 2017 high and subsequent August low. It has been trading just above the 200-period MA since early December. Price is trading below the 7, 21, and 50 MAs and the Ichimoku Cloud, facing very close resistance from the 7-period MA. If the support area fails, the next one will be found at $900-$1100 formed by the January 2014 top. As for the Indicators, the RSI is at 33, indicating neither oversold nor overbought conditions. It briefly went below 30 (oversold conditions) at the end of December 2018, but immediately jumped back. Finally, the MACD is very close to making a bullish cross.
- Price has found support at the 200-week moving average.
- The major support area is found at $2700-$3300
- The major resistance area is at $5900-$6100 with a minor area at $4300-$4400