Hello, dear traders! We’ll start today’s Bitcoin Price Chart Analysis with the conclusion that the number one cryptocurrency is still in the bearish period. We are aware that we haven’t reinvented the wheel with that statement. However, this time, we have a double bearish sentiment on our hands. In order to better depict the sentiment, we’ll use the 2-hour BTC/USD BitMEX perpetuals chart.
Therefore, as always, without any further ado, let’s get straight to the point.
The Descending Wedge Persists
The price of BTC is currently fluctuating around $7,155. Still, during the last few days, Bitcoin experienced a drastic decline towards the $6,400 merely to regain values above $7,000. Despite this high volatility, just like we predicted in the article published on November 25th, Bitcoin is still inside the falling wedge formation. The 12-hour chart below best depicts this trend.
This kind of price movement is quite predictable as is the long-term outcome. The bullish reversal commonly follows the falling wedge formation. Hence, it is quite simple to trade once the price confirms the breakout. However, trading inside the formation, although very rewarding, may prove complicated.
To present a few possible trading solutions, let’s zoom in and see what’s going on in the 2-hour chart.
Bitcoin Price 2-hour Chart Analysis
Usually, inside the big formation, several others appear along the way. This is also the case this time around. Besides looking at the big wedge dropping down towards $5,000s, Bitcoin price chart analysis reveals another bearish formation.
Yes, ladies and gentlemen. This is the bearish formation of the bearish triangle in the making. The lower highs are obvious, and the support at $6,500 held the price above the water two times already. This is important since, by looking at the price movement, we may trade inside the triangle as well as inside the wedge. So, let’s analyze some of the most important indicators to reveal the possibilities.
The Swing Rejection
Swing rejection is a trend reversal pattern which usually happens at or near the extreme values inside the formation. It is visible by the peaks of the RSI readings.
If the RSI doesn’t break through the overbuy barrier again, and the oscillator drops to the last low, Bitcoin will reject the swing and turn short-term bearish again. However, this is by no means a certainty, and traders should look to take positions only when everything gets confirmed.
We are aware that many traders don’t use swing rejection or are unaware of its importance. Therefore, if you want to learn more about this trading strategy or trend trading in general, read the article in the trading tutorial series written by our TA Team expert – HERE.
The next thing to do is to check up on the old MACD to see what’s going on with moving average convergence divergences.
The current state of MACD is short-term bearish as we can clearly see the death cross. However, the histogram is preparing to close the negative wave. This could make the prediction of the new lower high true. Nevertheless, as stated before, this is only a possibility, not a certainty.
Traders who read our analysis more often know that we like to play with Fibonacci time zones often. This time we are also not going to miss the opportunity to see what this medieval mathematician has to say.
Bitcoin Price Chart Analysis – Possibilities According to Fibonacci Timezones
It is always interesting to place Fibonacci timezones inside the formation when doing the Bitcoin (or any other cryptocurrency) price chart analysis. It can reveal the pattern of human behavior, and thus, be utilized for price movement predictions.
So, let’s see what it says.
Isn’t it fantastic how, by some magical mathematical way, it hits exactly lows and highs inside the descending triangle formation? It is magnificent, and, above everything else, useful.
The line marked by the number eight is the next reference point of our analysis. Therefore, let’s see the possibilities that are in correlation with Fibonacci time zones.
Of course, there may be numerous other possible outcomes. However, zones can provide a good anchor to base possible future trading positions on. Still, please note that these charts have significant differences between each other.
For example, traders who would place a long order now and wait for the price to reach the new lower high (2nd and 3rd Fibonacci charts) would record a loss if the 1st scenario would take place. Therefore, practice extreme caution when you trade derivatives with leverage.
With everything said, we have to conclude that Bitcoin is in a heavily bear-populated area. It is a matter of a day and swing trading knowledge and expertise to profit from these kinds of movements. Since at the time of the press the price of BTC has risen to $7,190, it is possible for us to see Bitcoin’s new lower high. Nevertheless, there is an approximate 80% possibility that moderate shorts will pay off during the next 10 days as the price most probably declines towards the $6,500 again.
It is also possible that Bitcoin breaks down of the triangle the next time it touches the $6,500 support. Therefore, don’t be hasty in closing your short positions once it reaches that level. In the end, it is always better to lose 1-2% than 10-15% of the possible further profit on the price decline. Wait for the confirmation of the next swing inside the triangle, and above everything else, trade responsibly!
You should look elsewhere for investment advice since this isn’t it. Even if it looks like it, it’s not. Cryptocurrencies are extremely volatile and risky speculations. Always do your own research. Consider consulting an investment professional prior to investing your money.