Bitcoin seems to remain stuck in the range between $7,000 and $8,000. After a rapid rise to the price of $10,000 in the fall of 2019, it plunged and has not yet recovered. What happened to the cryptocurrency, and what to expect from it in the near future? Read our BTC price technical analysis.
Technical analysis of BTC: the most important indicators to watch
Let’s focus on the following parameters: MA150/200, the Cycles’ High Volatility Zone, and the LMACD.
MA150/200 Shopping Zone. On the 1-week chart, the zone between MA150 and MA200 is at the bottom of each cycle. This is a great opportunity to enter the market.
High Volatility Zone. While the MA150/200 zone provided the bottom, there is a certain zone that attracts the highest volatility during the bear cycle and the first year of recovery. You can see this in the orange area between the 0.382 and 0.618 Fibonacci retracement levels.
Right now, BTC is trading right above the 1W MA150 (blue trendline) after finding support (so far a double bottom) following the recent drop. The MA150 is now at the 0.382 Fibonacci level. The price traded at exactly the same level in February/March 2016.
We can suggest that Bitcoin consolidates again within the High Volatility Zone after finding support on the MA150. The only difference with the previous cycle is that this year the price broke out above the zone in June 2019, but eventually corrected back into it.
LMACD. LMACD (Logarithmic Moving Average Convergence Divergence) is important during BTC technical analysis when we notice that the next aggressive Bull run is starting. As a result of that breakout above the High Volatility Zone in June 2019, the LMACD indicator never showed the consolidation it did in the previous cycle and, just as it rose aggressively, it is on an equally strong decline on the moment. Traders are waiting for the bullish crossover on the LMACD which will essentially signal that the consolidation within the high volatility zone has ended and we are about to enter the parabolic bull phase to new all-time highs.
The role of halving
The upcoming halving in May 2019 plays a key role in this. In 2016, the consolidation ended just before the July 2016 Halving (2nd). After a supply shock and subsequent decline, we entered the Parabolic Bull phase that lasted up to the $19,900 all-time high. The May 2020 Halving is not that far away and we can see similar price action.
But before that happens, we may see the final touch on the $6,775 price level before exiting the consolidation area. People can start buying BTC because of the 2020 May next halving as the main reason.
If we see one of the patterns (reversal patterns, price actions, candlestick formations) in that particular area ($6,500-7,000), we can consider buying BTC from there. The first targets would then be $9,000 and $11,500.
Could BTC Break Out in 2019?
According to the Bitcoin technical analysis of the chart above, Bitcoin’s next move will depend on either a break of support or a break of local resistance at the $7,800 level.
We must consider the following points:
Trend is bearish Local resistance is found at $7,800 Support at .618 Fibonacci Stochastic in upper regions RSI Deviation from price Volume remains below average EMA’s crossing
BTC/USD trend is currently in control by the bears as there are consecutive lower highs on the chart.
Local resistance is found at the $7,800 mark – a key level for the bulls to break to negate the overall market structure. Local support is in confluence with the .618 Fibonacci level: this is a must-hold price. The level must hold for traders to expect a new higher low in the trend.
The stochastic is currently in the upper region and will remain there for a long period of time through the momentum to the downside. The RSI has deviated from the price, creating a bullish divergence. The volume is below average: an influx of volume is needed to avoid a false breakout.
Bottom line
Bitcoin’s technical analysis tells us that we are currently at a critical point where a break in either direction will determine the fate of the trend in 2020. A bearish break of a key Fibonacci level will increase the probabilities of further lower lows. A bullish break of local resistance ($7800) will negate the bearish structure and bring in a new probable higher low.
Disclaimer for Uncirculars, with a Touch of Personality:
While we love diving into the exciting world of crypto here at Uncirculars, remember that this post, and all our content, is purely for your information and exploration. Think of it as your crypto compass, pointing you in the right direction to do your own research and make informed decisions.
No legal, tax, investment, or financial advice should be inferred from these pixels. We’re not fortune tellers or stockbrokers, just passionate crypto enthusiasts sharing our knowledge.
And just like that rollercoaster ride in your favorite DeFi protocol, past performance isn’t a guarantee of future thrills. The value of crypto assets can be as unpredictable as a moon landing, so buckle up and do your due diligence before taking the plunge.
Ultimately, any crypto adventure you embark on is yours alone. We’re just happy to be your crypto companion, cheering you on from the sidelines (and maybe sharing some snacks along the way). So research, explore, and remember, with a little knowledge and a lot of curiosity, you can navigate the crypto cosmos like a pro!
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