Good Day,
I have been keeping tabs on Bitcoin on a daily basis lately and we are starting to see some bullish price action. Don't get me wrong. The road ahead is long and very bumpy, but Bitcoin may have found a floor today.
First, you will notice the yellow trend lines that I have drawn on the chart. We touched the top trend line and found resistance there. After hitting the top trend line, the price dropped quickly to the bottom trend line. We tested this trend line and consolidated along this trend line. We are getting a buy signal on the MACD at the bottom of screen, which is the only bullish sign on the daily chart. You will notice that we had a similar buy signal on the MACD back in the beginning of January for a brief moment. We could very well see that same thing happen again. So the daily chart doesn't show anything too promising, but lets take a closer look at what is happening.
Lets take a closer look at the price action on a 4 hour chart....
You will notice that the four hour chart is showing more bullish signals.
- MACD is is showing a buy signal
- The 20 day moving average has crossed above the 50 day moving average for the first time since testing both upper and lower trend lines.
- We have broken above the cloud for the first time since testing both trend lines.
- The Ichimoku Cloud is starting to flip which would show future support.
- If this flip holds up as a support we should not see price drop below $11,400
- Price is currently higher than the future cloud flip, which is also a bullish sign.
You will notice on the daily chart that we are up against the 20 day moving average which is the first level of resistance that we need to break through (about $12,125). If we can reach this level, then I think it is safe to say that $13,000 would be the next resistance. This is the most important level of resistance in my opinion. You will notice on the daily chart that we found good support two different times at the end of 2017. On the third test of this support level it finally fell through. Once the price falls through a strong support level, then it becomes a strong resistance if the price rebounds. The price came back up to test this level of resistance back on January 20th and failed. However, the lower trend line held up very well as support.
Price has been range bound as you can see on the daily and 4-hour chart. In order to get a better idea of which way the price could end going, then we must look at the hourly chart.
If you recall from the 4 hour chart analysis, that the $11,400 was my predicted new support level. Now take a look at the yellow rectangle on the one hour chart. Ever since we crashed through that $13,000 price level one could argue that the price has been trying to rebound. It has tested that resistance level (yellow rectangle) on multiple different occasions.
Today we had a strong green candle that broke this level of resistance on the hourly chart so it has now become a resistance area. The 20 day moving average is being respected. Price is riding it higher. The MACD and PSAR are showing sell, but one could anticipate a flip for both of them.
Please feel free to leave any comments, opinions or questions and I would be happy to discuss.
I do not provide tax, legal, accounting, or financial advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, accounting, or financial advice. You should consult your own tax, legal, accounting, and financial advisors before engaging in any transaction.