Following our previous price analysis, the significant Stochastic RSI oscillator had crossed over at the oversold area.
This led to the anticipated positive correction, which produced a nice move to re-test $3700 tough resistance area. The mentioned resistance includes the 4-hour chart’s 200 days moving average line and the daily chart’s 50-day moving average line.
From there, Bitcoin got rejected, and along with the bad news which came from Ethereum, broke down the $3600 one more time, to find support on the ascending trend-line.
Looking at the 1-day & 4-hour charts
- Bitcoin is now trading between a descending and an ascending trend-line (marked in orange on the following 4-hour chart), which forms up a triangle. The apex of the triangle is nearby. Hence, we do expect a move to either direction during the next couple of hours.
- From above, the next resistance levels are $3600, $3700 (as described above) and $3800 (along with the 50 days moving average line of the 4-hour chart).
- From below, $3480 – $3500 is the weekly low. The next support levels lie at $3400 and beyond – $3300.
- The Daily Chart: The RSI indicator found support on top of the 43 RSI line. This could be a positive sign unless it will break down shortly.
- The trading volume is still pretty low. However, the average volume is still twice the volume traded before the breakdown of the $6000 level.
- BitFinex’s open short positions dropped again to 22.4K, which is the lowest level since November 14 (the day when Bitcoin broke down the $6000 support line). A long squeeze coming up? Remember – when shorts are at their high – expect a short squeeze, and vice versa. This is why the bulls don’t like the current situation here.
BTC/USD BitStamp 4-Hour chart
BTC/USD BitStamp 1-Day chart
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Cryptocurrency charts by TradingView.