Skip to main content

BITCOIN LOOKS BULLISH, BUT COULD THIS ACTION LEAD TO A FALSE BREAKOUT? BTC PRICE ANALYSIS




Following the colossal price rally, Bitcoin continued in its explosion above the 5-digit mark. Following a day of consolidation at the significant $10,500-$10,600 resistance level (along with the daily MA-50), the coin’s price broke impressively into the next resistance zone of $10,800-$11,000.
However, after recording a new 14-day high at $10,919 on Bitstamp, Bitcoin encountered the long-term ascending trend line. That line had supported Bitcoin since the beginning of May, and Bitcoin only recently broke below it. Yesterday was the first attempt to get back above the line, testing it as resistance.

The strength of the descending trend line was proven by the fact that Bitcoin touched the line, got rejected, and quickly lost around $350 of its value, returning to test the $10,500-$10,600 area as support.
The RSI momentum indicator (shown on the 1-day chart below) finally broke above 50, entered bullish territory, and turned around precisely upon reaching our marked resistance at 56 RSI.

A word about the altcoins – well, when you don’t believe things can get any uglier, new floors are discovered. It will be hard for the altcoins to generate any momentum in the face of Bitcoin’s high volatility. As we mentioned in our altcoin trading guide, the vast majority of those coins will simply bleed to death over time. It doesn’t matter whether Bitcoin’s price goes up or down.

Total Market Cap: $287 billion
Bitcoin Market Cap: $191 billion
BTC Dominance Index: 66.6%

Key Levels to Watch

Support/Resistance: After being rejected from the daily long-term ascending trend line (drawn in bold orange below), Bitcoin experienced the latter as the latest significant resistance level, along with the $11,000-$11,200 area. In the case of a break up, the next possible resistance levels are $11,500 (along with the 2019 high descending trend line marked in yellow on the daily chart), $11,800, $12,000, $12,200, and $12,500.

From below, the nearest support area is $10,500-$10,600 (resistance-turned-support), which also contains the significant 50-day moving average line (marked in purple on the daily chart). Further below lies the support zone at $10,000-$10,200, which contains the 4-hour chart’s MA-50 (purple line) and MA-100 (white line). The nearest levels of support below $10K are $9,800 and $9,550.
Daily chart’s RSI: discussed above. The Stochastic RSI oscillator is about to cross over to the downside and enter oversold territory. If this plays out, Bitcoin will likely experience a deeper correction before trying again for those higher levels (remember, we are in a bull market until proven otherwise).
-Trading Volume: As mentioned in our previous price analysis, the last spike didn’t carry high trading volume levels. This was reflected in the rejection upon reaching the ascending trend line (acting as resistance). If Bitcoin wants to firmly conquer higher levels, it must be backed by more significant numbers of buyers.

BTC/USD Bitstamp 4-Hour Chart


BTC/USD Bitstamp 1-Day Chart



Comments

Popular posts from this blog

Bitcoin Hash Rate Hits All-Time High: Here’s How It Works And How It Affects The Price

Bitcoin intelligence, data, and analytics firm Glassnode found the Bitcoin hash rate hit a new all-time high over the weekend, ten days before the Bitcoin halving event. In other words, miners are putting more computational power into maintaining the Bitcoin network. Because miners must venture electricity and capital intensive computer processors to mine Bitcoin, the increase in hash rate is a bullish sign. It means miners are after the Bitcoin rewards they get from maintaining the network. And they’re venturing the resources to go after those rewards. Is The Bitcoin Hash Rate Correlated With The Price? In general, the Bitcoin price and the hash rate are not correlated. The price is what buyers and sellers agree to pay for one Bitcoin, and there are many factors – external and internal – affecting the price. However, there is a relation between the two. While the price goes up, it’s more profitable to mine, which likely to cause more miners to turn on their mining equ...

South Korea Won’t Tax Cryptocurrency Profits, For Now

Good news for cryptocurrency traders in South Korea as profit generated from crypto trading will not be subjected to tax, according to a recent announcement from the country’s Ministry of Finance and Strategy. The Ministry clarified that the current tax law does not consider crypto trading gains as taxable income; thus, Korean crypto traders are not required to pay taxes on the profits they earn from crypto trading for the time being.  However, crypto traders in the country may not be exempted from taxation for a long time. An official of the Ministry said that the Ministry is aware of the loophole in the current tax law, and they are currently reviewing the regulations in major foreign countries so that they can amend theirs in an effective way. “The income tax law is only taxable on income listed as taxable. We are preparing a taxation plan for virtual assets by comprehensively reviewing the taxation of major countries, consistency with accounting standards, and trend...

IN THE NEW DECADE, CRYPTO WILL BECOME ESSENTIAL LIKE EMAIL: SAYS TYLER WINKLEVOSS

It’s the start of a new decade, and industry famous twin Tyler Winklevoss, the co-founder, and CEO of cryptocurrency exchange and custodian company Gemini Trust, has shared his views on what the next ten years hold for crypto. According to Winklevoss, crypto is already becoming more than a niche technology and a form of money, and it will play an essential role in our daily life in the foreseeable future. “Today, crypto is still a niche technology and a form of money. It is not crucial to your everyday life the way email and other web applications are, but our thesis is that this will change — it’s already changing if you look close enough,” Winklevoss wrote. Winklevoss added that the decentralized nature of cryptocurrencies, which empowers individuals, will be the driving force within the new decade. Crypto will not only redesign the internet but will also redesign the financial and monetary systems to protect the rights and dignity of users, he said. The Winklevos...