A warm hello to our traders. So, after a nice rally, here comes a period of doubt again. However, never fear since there is an opportunity in every bearish mini-movement. Therefore, CoinSyncom’s TA team has prepared a detailed Bitcoin price technical analysis on a 12-hour BitMEX BTC/USD perpetual contracts chart.
The Basics of the Breakout
Just like we predicted on that faithful November 11th, 2019, Bitcoin finished the year at around $7,000. Also, as CoinSyncom forecasted back then, the breakout happened at the beginning of the year. In fact, it was a member of our TA team (wants to remain anonymous because of “beer reasons”), who stated the following in a certain Telegram group after he couldn’t restrain himself anymore.
Needless to say, that’s exactly how it happened.
Anyway, let’s look at our first 12-hour BTC/USD BitMEX perpetual chart to see how it came to pass.
This historical chart reveals that, after a prolonged falling wedge formation, Bitcoin broke out on January 6th (yes, that date is between January 4th and 9th, duh), in an interesting ascending channel. The price was, approximately, $7,500 (well, yes, he missed by $100. Shame on him!).
This was as natural as bullish reversals come. However, after following the channel for more than a month, our Bitcoin price technical analysis shows that this has come to an end. At least temporarily.
The Channel Break Down
The 10-hour chart below beautifully depicts the current stance and the reason for the break that Bitcoin made downward from the channel. BTC was beautifully bouncing from both trend lines and eventually reached $10,500. However, the last time it hit the higher low, Bitcoin failed to go across the middle of the channel and confirm the trend (the red market below).
In the meantime, the Open Interest indicator you can find on Coinalyze was showing that the amount of money invested in the Bitcoin market dried out and started declining. Of course, this meant that the short-term trend reversal was on the way.
The exact moment of the trend reversal is visible by the RSI divergence spotted on February 14th. Of course, as we all know, RSI divergences are quite relevant when it comes to trend reversals, and this one also didn’t disappoint.
After the breakdown, Bitcoin failed to re-enter the channel, and the lower trend line became a sort of resistance. This means that we might still see BTC falling towards some lower levels seen in January.
Which ones? Well, let’s see…
Bitcoin Price Technical Analysis – Retracement Levels
In the following chart, we are going to show some possible scenarios that Bitcoin may follow in the weeks to come.
Since the formation’s top at $10,500, Bitcoin already dropped to the 0.236 Fibonacci level at $9,500, marking a 9.5% decline. However, since it still failed to re-enter the formation, it is highly possible for us to see it plummet a wee bit more.
The next possible level Bitcoin is facing is a 0.382 Fibonacci level at $9,000. This level would then turn from what used to be resistance in mid-January into support. On the other hand, if the price slides further down towards $8,500 at 0.5 Fibonacci level, that may press the FUD button. Then, as we all know, everything is possible.
Just to show how things work in technical analysis, we decided to broaden the chart above. What you are about to see is a perfect match between supports and resistances throughout two distinct formations (red markers). That of the former falling wedge and this ascending channel we’ve been following since early January.
According to this historical chart, the most possible scenario is that BTC will bounce off the 0.832 Fibonacci level ($9,000). That level provided important support 5 times already, which is not to be disregarded lightly. If that will be the case, Bitcoin will retain the bullish sentiment and, quite possibly, continue the rally.
Bitcoin Price Technical Analysis Conclusion
Despite the fact that all evidence point towards the correction, as we said many times before, traders should not underestimate the power of FOMO. Therefore, set your stop-losses accordingly.
Still, the overall market sentiment towards Bitcoin remains bullish. What Bitcoin and the rest of the cryptocurrencies need most now is the influx of fresh money. Simply put, if the rally is to continue, new buyers should come into the game. Without the new money, the bubble is simply going to burst.
In the end, if this seems like a bearish TA, remember, there are those even more pessimistic.
All charts in the article were analyzed on Coinalyze.net – the professional trader’s analysis tool.
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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.
Thanks for sharing!