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 is following an underlying bullish trend, and in the short term, we’ve begun to see a sustained upward trend that can now be considered medium-term. Could this be the start of a new bullish market for Bitcoin?
Currently, the price of Bitcoin is at $48,200, marking an impressive surge of over 215% since the late 2022 lows. A truly remarkable rise for this year, right? What do you think is happening?
Switching over to the weekly chart, you’ll notice that the price has been riding an upward trend since the beginning of the year, forming higher highs and higher lows.
Now, in the past few weeks, the price has been literally skyrocketing, breaking through the significant levels of 45,000 and even 48,000. The most likely scenario is either a brief consolidation before continuing the ascent or a direct push towards the next significant level
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 on a pretty bearish run, and the $17,000 zone provided a bit of a slowdown.
After breaking through that support, it pulled a fakeout, retracing back inside, kicking off the short-term bullish trend we’re rocking right now.
This entire bullish trend it has been building allowed the buyers to push hard and smash through the psychological barrier of $45,000.
Now, after breaking December’s highs, the trend has continued upward. Thanks to various factors (including the news about BlackRock’s ETF launch and the upcoming halving in April 2024), it managed to explode up to around $48,000, encountering substantial demand. It sliced through that zone, creating a rejection that’s keeping the price above it.
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 need to consider what kind of investor you are. If you’re in for the long haul (a holder), you’d wait for support zones to accumulate positions, not worrying much about price fluctuations. On the flip side, if you’re into trading (a swing trader), you should be clear about where to place your entry, stop loss, and risk.
In both cases, you can leverage the opportunities presented by the two key points I’ve marked on the chart for the following:
- If you’re a holder, you might want to consider utilizing the range around $40,000 – $45,000 USD to accumulate more BTC. That would be the sweet spot right now if the price takes a breather in that range. Alternatively, you could play the waiting game for it to possibly drop back to $35,000 – $30,000, although that’s a lot less likely.
- Another option is to try your hand at swing trading, catching a move between the support and resistance zones or vice versa. In this case, you’d be eyeing the support around $45,000 up to the next resistance at $50,000.
3- Weekly Average
As of today, we can (and should) adjust our technical indicators to ensure their helpfulness. Even if the weekly moving average is not perfectly configured, it won’t lead us into major disasters. In any case, we’ve configured it to make significant differences in terms of accuracy and usefulness. The blue line indicates bullish moments, while the red one depicts bearish ones. Let’s see what happens in this case.
The weekly moving average has been on an upward trend for over 11 months (shown in blue), indicating that we’re still bullish in the medium-term trend. Currently, there’s a lot of price-value tension, so the price should ease up a bit from this sudden surge, find support, and then bounce back with strength. Do you see the picture here? What decision would you make in this situation?
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.
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 is still on the rise, as we discussed earlier, and the MACD indicator is in sync with it smoothly. So, there’s no sign of any divergence at the moment.
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 indicates that the price is high and in overbought territory, suggesting a bearish signal. As we know, being an oscillating indicator, it doesn’t cope well with prolonged trends and tends to be the first to signal such divergences. While the price keeps going up, the RSI has already started to decline, showing a weakness and a divergence.
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.
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 signify swift price movements, while the smaller ones indicate calmer periods. In the daily chart, I’ve marked (yellow rectangles) the recent periods of significant volatility in Bitcoin.
If you’ve made it this far, it’s because you already understand the basics. You’re familiar with what Bitcoin is, but you’re eager to know what might happen next. We’re going to share our insights into what could unfold from here on. However, we don’t promise it will happen. This is our deduction based on various patterns, but it’s not 100% reliable.
The monthly chart is decidedly bullish, and on the weekly timeframe, we’re maintaining a medium-term bullish trend. The key here is for the price to revisit the $45,000 zone, wait for a pattern to emerge for a buying opportunity, and aim for an upswing to $48,000 or even $50,000. The crucial factor is ensuring that the weakness in the indicators doesn’t pull the price down in a new correction. Certainly, the price action and its structure demonstrate the strength to pull off such a move.
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.