Bitcoin Price Analysis: BTC Consolidation Near $11K – Calm Before the Storm?

Since our previous BTC analysis and over the past three days, Bitcoin has exhibited a triangle formation pattern. The apex of that triangle should be reached in 1-2 days. However, a breakout to either side could signal the next short-term direction for Bitcoin.

As can be seen on the following charts, Bitcoin reached down precisely to the short-term ascending trend line support. The trend line has been forming since Bitcoin began its bullish move from ~$7,500 to the current 2019 high at nearly $14,000.

Overall, the market is still bullish, showing significant strength in 2019, and especially over the past 60 days.

Aside from Bitcoin, looking at the rising BTC dominance and the total crypto market cap, it’s clear that altcoin holders are suffering hard. This means that the last rise was largely due to traders selling altcoins for bitcoin, and not from new money entering the crypto markets.

Total Market Cap: $335 billion

Bitcoin Market Cap: $208.5 billion

BTC Dominance Index: 62.0%

Support & Resistance

As can be seen on the 4-hour chart, Bitcoin is consolidating, and the lower boundary is aligned with the upper ascending trend line (~$11,500). Keeping up the latter level could signal another bullish move for BTC.

If it were to break down, Bitcoin would be likely to check lower support levels at $11,200 – $11,300 (78.6% Fib level, prior high), $11,000, and $10,600. Further down are $9,800 – $10,000 and $9,400. In my opinion, as long as Bitcoin stays above $9,400, the long-term picture is still green and healthy.

From above, Bitcoin marks the $12,000 – $12,200 area as the closest resistance zone. The next level is $12,500 prior to $13,000. Breaking the recent 2019 high at $13,880 (and the $14,000 area) would likely send Bitcoin to the $15,000 zone since there is not much resistance along the way. The next zones are $16,400 – $16,650, $17,400 (the January 7, 2018 high), $18,000, $19,300 and $20,000 – the current all-time high from December 2017.

Daily chart’s RSI

After reaching the overbought area at 88-90, the RSI dumped to 62. From there it corrected to 70, and then was rejected by resistance. Over the past few hours, the RSI has been above the 62 support level again.
The Stochastic RSI Oscillator indicator on the daily chart is about to generate a crossover in oversold territory. If the oscillator entered bullish territory following a crossover, this could initiate another upside move.

Trading Volume

Last Wednesday and Thursday were the top two volume days in 2019. However, we are still far from the crazy days of the recent so-called crypto bubble from Nov. 2017 to Feb. 2018.

Bitfinex Open Short Positions

After reaching a 30-day high at 30.7K BTC, the number of short positions now lies at 29.8K. That’s still relatively high relative to the past month.

BTC/USD Bitstamp 4-Hour Chart

BTC/USD Bitstamp 1-Day Chart