Alright, so check it out—Bitcoin is and always will be the top dog in the crypto game. Its rarity, security, decentralization, transparency, and worldwide recognition as a value haven make it a rock-solid foundation in today’s crypto scene. Now, if you’re up for it, let’s dive into the nitty-gritty of Bitcoin’s technical analysis chart. Ready for the ride?
Bitcoin Chart and Trend analysis
This chart follows a long-term upward trend, and in the short term, we continue to see a bullish continuation.
Currently, the price of Bitcoin is at $67,600, which represents an increase of more than 340% from the lows of late 2022. Truly an incredible rise for this year, right? What do you think is happening?
If we switch to the weekly chart, you’ll see that the price has continued an upward trend since the beginning of the year, creating higher highs and higher lows.
However, in recent months, it has entered a sideways phase between the key levels of $70,000 and $60,000. The most likely scenario now would be for it to continue moving sideways in this zone a bit longer and then gain more strength to continue upward.
Bitcoin technical and trend analysis
For the technical analysis of Bitcoin, it’s crucial to be adept at reading charts and understanding their context, such as chart trends, entry and exit patterns, support and resistance levels, and more. That’s why we’re going to delve into all the technical indicators displayed on today’s Bitcoin chart.
1- Support and resistance
The difference between support and resistance is minimal: they are essentially the same. The only distinction is that supports are positioned below the price, and resistances are above. Where are the levels situated on this Bitcoin chart?
As you can see, Bitcoin was very bearish and the $17,000 level helped it to slow down a bit. After breaking that support, it made a false move and returned inside to start the current short-term bullish trend.
This bullish trend has allowed buyers to push strongly and break the psychological barrier of $70,000.
Now, after breaking the highs of December, the trend has continued upward, and due to various factors (including the news of BlackRock’s ETF launch and the halving that just occurred a few days ago), it has surged to around $70,000 with high demand, crossing the zone and creating a rejection that keeps the price below resistance within a large accumulation area.
2- Where to enter and where to exit
Nailing your entry, exit, or even the stop-loss isn’t a walk in the park. If you were thinking of manually exiting the trade, you might as well forget about it; it won’t do you any good. Knowing when to enter a trading operation is crucial, but it’s even more vital to exit correctly. So, here we go. Let’s pinpoint our key points:
You should consider what type of investor you are. If you want to buy for the long term (holder), you would wait for support zones to accumulate positions. You wouldn’t mind the price oscillating as much. However, if you enjoy trading (swing trader), you should be clear about where to place your entry, stop loss, and risk.
In both cases, you can take advantage of the opportunities provided by the two key points I’ve marked on the chart for the following:
- If you’re a holder, you can use the area around $52,000 or $60,000 USD to accumulate BTC, which would be ideal right now if the price gains momentum there again, or wait for it to return to the $50,000 – $45,000 range. As you know, anything can happen in crypto, so the price could potentially drop back to the $17,000 zone, though it’s much less likely.
- Another option is to try swing trading, moving between support and resistance zones or vice versa. This would involve waiting for support at $60,000 before moving to the next resistance at $70,000 or aiming for higher targets at $80,000 and $90,000, which correspond to Fibonacci projections calculated from the last surge (i.e., where the price is most likely to stop.)
3- Weekly Average
The weekly moving average has been bullish (blue) for over 8 months, so we continue with a bullish trend in the short term. Currently, there is no price-value tension, and the price has already sought some support to rise again. Do you see it clearly? What decision would you make?
4- Divergences
When a divergence occurs, something is fishy, something is off because the price and something inferred from the price don’t match. If you want to learn how to read an indicator when looking for divergences, click here. Now, let’s start by identifying those contradictions between the price movement and a technical indicator on the bitcoin chart.
MACD
There are few occasions when significant MACD divergences appear on weekly charts. However, when they do, caution is warranted as significant changes are on the horizon. Let’s analyze the bitcoin chart. What do you notice at first glance? Share your insights. 😉
The price continues in the sideways zone we mentioned at the beginning, and the indicator is starting to decline, which is not aligning with these new highs. We could be facing a bearish divergence. Remember, this doesn’t necessarily mean the price will drop immediately, but it could be losing upward momentum.
RSI
The RSI moves between 0 to 100 and indicates whether the price is expensive or cheap. Two scenarios can occur:
- The price is very high, leading to overbought conditions (levels above 70).
- The price falls below 30 (oversold or very low).
The RSI on this chart shows that the price is high and in overbought territory, while the price continues to rise. Currently, the price is in a sideways zone, but the RSI has already begun to slow down, indicating weakness and a bearish divergence. It’s important to remember that the RSI, as an oscillator, tends to behave this way in strong trends and is often the first to signal a potential divergence.
Triangles
Technical analysis with cryptocurrencies involves various patterns, and one of them is triangles. There are different types such as the ascending triangle, descending triangle, and symmetrical triangle. Which one is present in the Bitcoin chart?
As of now, we don’t see any triangle formations, and the price continues to experience a strong upward movement with minimal pauses.
4- Volatility
Volatility is often a sign that the price is accelerating in a certain direction. To gauge the current volatility of Bitcoin, let’s examine the Japanese candlesticks. Remember, interpreting candlesticks in trading is a matter of common sense.
The larger candles represent rapid price movements, while the smaller ones indicate quieter zones.
In the daily chart, I have marked (in ORANGE rectangles) the recent periods where Bitcoin has experienced high volatility. As you can see, in recent weeks, there has been a decrease in volatility; strong hands have sold off slightly in the form of strong red candles, causing the price to exit the accumulation zone. Although these moves haven’t caused significant drops, they have halted the price rise during the sideways phase. Currently, they are back with more aggressive buying.
An interesting point to note in the current zone is that there have been several days of increased volatility followed by a drop the next day… this could indicate that the strong hands are pushing but also selling part of their portfolio. This could be a clear indicator of accumulation to continue the upward trend.
Bitcoin Forecast
Trading Bitcoin
As you already know, trading with Bitcoin is a delicate matter. Buying and selling, capitalizing on price changes, is not a game. You need to educate yourself to do it effectively and profitably. Everything else will only lead you to waste time and money. Do you really want that? Life is to be enjoyed day by day as if it were the last, don’t you think?
Don’t procrastinate. If you want to learn how to do it right, practice with us, and remember to store Bitcoin in the world’s safest wallet, Material Bitcoin. 😎 And, of course, don’t forget to keep an eye on the Bitcoin chart with us. The more you practice, the better you’ll get. But don’t buy just because the price reaches support; always wait for confirmation.
If you have doubts or questions, join our Telegram channel!
For more in-depth analysis, check out our technical analysis of Ethereum.
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