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 witness a short-term bullish explosion. Could this be the start of a new bull market for Bitcoin?
Right now, Bitcoin’s price is at $64,300, marking an increase of over 315% from the lows of late 2022. A truly incredible surge for this year 2024, isn’t it? What do you think is happening?
If we switch to the weekly chart, you’ll see that the price has been following a bullish trend since the beginning of the year, creating higher highs and higher lows.
However, in the last few weeks, the price has literally exploded and has broken through the significant level of $70,000. The most likely scenario now would be for it to consolidate sideways a bit in that area and gather more strength to continue its upward momentum.
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 in a very bearish trend, and the $17,000 zone helped to halt its decline somewhat. After breaking below that support, it made a fakeout and returned inside, to start the short-term bullish trend we currently have.
This entire bullish trend it has been building allowed buyers to push strongly and break through the psychological barrier of $70,000.
Now, after breaking December’s highs, the trend has remained bullish, and due to various factors (including the news of BlackRock’s ETF launch or the recent halving), it has exploded up to resistance around $70,000 with significant demand. It pierced through the zone and created rejection, keeping the price below resistance.
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 so much if the price oscillated. However, if you enjoy trading (swing trader), you must 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:
- If you’re a holder, you could use the area around $50,000 to $60,000 USD to accumulate BTC, which would be ideal right now if the price takes a breather there, or wait again for it to return to $45,000. As you know, anything can happen in crypto, so the price could return to the $17,000 zone, although it’s much less probable.
- Another option is to try catching a swing trading move between the support and resistance zones or vice versa. This would entail waiting for support around $60,000 up to the next resistance at $70,000 or towards marked targets of $80,000 and $90,000, which correspond to Fibonacci projections calculated from the last impulse (where the price is most likely to stall).
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 bullish for over 5 months (blue), indicating that we’re still bullish in the short-term trend. Currently, there’s a lot of price-value tension, so the price should ease off this sudden surge, find support, and then resume with strength.
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 its ascent as mentioned earlier, and the MACD indicator accompanies it seamlessly, indicating that there is no divergence of any kind.
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 indicates that the price is high and in overbought territory, while the price continues to rise. Currently, the price is in a free upward trend, but the RSI has already begun to slow down, showing weakness and a bearish divergence in a sideways pattern. Remember that the RSI, being an oscillator, tends to behave this way in strong trends and is often the first to signal a possible 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’ve marked (orange rectangles) the recent periods where Bitcoin has experienced significant volatility. As you can see, in recent weeks, there has been a downturn in volatility. The strong hands have sold off slightly, shown by the presence of strong red candles. Although these haven’t caused significant drops, they have slowed down the price increase.
The interesting observation is in the current zone: there have been several days of upward volatility followed by a downward day. This could indicate that the strong hands are pushing the price up but also selling part of their portfolio. This could be a clear sign 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.
0 Comments