Would You Like To Buy Bitcoin At $8,000?
Good Day,
As discussed in my previous post, here, you will notice that price action fell to the S1 support level (white horizontal line). The lower trend line (yellow diagonal line) intersects with the S1 support level to provide additional support.
Price is very tightly bound at the moment. There is support from the S1 support level as well as the lower trend line. However, if price tries to go higher, then there is resistance from the 20 day moving average from above. One of these will have to give eventually. Which will it be?
Sometimes a look at the weekly and four charts can help us see a clearer picture on what may occur within the next few days when there is a stalemate occurring on the daily chart.
So, lets take a look at the weekly chart first.
The first thing I noticed was the MACD at the bottom of the screen (purple and cyan line) has turned bearish. It is hard to observe in the screenshot, but I took a closer look at the history to see when the last time this signal was bearish. It was clear back in 2016. You will also notice that RSI has been in the overbought range for most of the second half of 2017.
It is not all doom and gloom as we are starting to bump into the 20 week moving average (purple line), which coincides with the lower trend line (yellow diagonal line). These lines act as a good level of support.
What about the 4hr chart?
Many reasons to be bearish here:
- Below the Ichimoku cloud
- Broke below the S2 pivot point
- MACD is giving a sell signal
- Price is below both moving averages, which are both sloping downward.
But, wait! Don't get too discouraged yet. Have faith in the lower trend line. Notice, that we have been hovering around the oversold territory on the RSI. The last time we were oversold, according to this indicator, was when price previously dropped down to test the lower trend line. It rebounded very nicely after testing this support.
Overall, Bitcoin appears to be at a crucial point on the daily chart. If the lower trend line can not hold, then we could see price drop down to as low as $8,000 or even lower. On the contrary, if the lower trend line holds, then we could see the price rebound. If we could cross above the 20 day moving average, then the first resistance would be around $13,000 area.
If you find my analysis useful, then please follow my page and ask questions or leave comments. I would be more than happy to assist with ANY questions or concerns that you have.
LEGAL DISCLAIMER
The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.