Technical analysis (BTC/USD): Watchout as Bitcoin testing critical resistance, Can go bullish
Hi friends! Let's take a look at Bitcoin! Looking at the four hour chart, we can see that it's still trading inside of the bear flag . However, the bulls are making up some lost ground.
Currently BTC is breaking above the 50 EMA (in orange,) and finally rallying up to test the bottom of the heavy overhead resistance level . A break above the heavy resistance level will be a solid victory for the bulls, assuming they can hold it. Looking at the volume indicator, we can see that there was a pop in buy-side volume , as the bulls pushed higher into the 50 EMA .
A test of the bottom side of the heavy resistance level , at the 50% retrace, seems imminent. A sustained breakout above that, should send BTC up to test the 200 EMA (in purple.) However, if BTCis rejected at the heavy resistance level , a breakdown from the bear flag could ensue. If BTC does manage to finally up to the 200 EMA in purple, it will pretty much negate the bear flag .
Looking at the overall picture, you can see that when BTC fell below the rising black trendline , it fell very rapidly, without ever returning to test it and define it as over head resistance. So, technically, it has not been proven to be resistance yet. What could happen, is that we could see this market head all the way back up to to the black trend line , test it and confirm it as resistance, and then dump. If we do get back up to the black trendline , it will be a very important level to watch.
All-in-all, mixed signals are starting to develop in the crypto space. I'm seeing some bullish reversals, and some bearish continuation moves. I think this is a point where it's best to sit back, watch the market, and let it decide which way it wants to go.
Upside resistance lies at the 50% retrace, followed by the 200 EMA (in purple.) On the downside, the bottom of the bear flag may be supportive, but a drop below it should send BTC down to the 61.8% retrace.
Good analysis! Thanks!