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Bitcoin (BTC) is traded around $30,000, forming the eighth a consecutive bearish weekly candle. This is the first such episode in the history of cryptocurrency.
On March 28, bitcoin reached a local peak of $ 48,234 and since then only red candles have formed on the weekly chart for BTC. On May 12, the price formed a minimum of $ 25,400 and recovered from it to current levels. The size of the maximum drawdown of the market was 47%.
BTC touched the long-term support at $ 28,800, and also reached the Fibo level of 0.618 of the move from the levels of March 2020, when the price collapsed amid the beginning of the COVID-19 pandemic. If this support does not hold, the next targets will be the 200-week MA at $22,000 (blue line) and the Fibo level of 0.786 retracement at $18,000.
Long-term technical indicators BTC
Technical indicators of the weekly chart give bearish signals. The RSI index is overbought at 34.50 (red line), which is comparable to the level of March 2020 (33).
The MACD forms the sixth consecutive red bar of momentum. However, bullish divergence develops here compared to the second half of January (blue lines). Then bitcoin was groping for support around $ 36,500, the Fibo level was 0.5, and the MACD momentum was at lower levels.
It is worth noting that the RSI index on the monthly chart reached a long-term buying area in the range of 44-48 (green rectangle). In the entire history of BTC, this monthly indicator has only twice been in this zone – in January 2015 and in January 2019. In addition, once, in March 2020, it made a rebound from these values.
Now the value of the monthly RSI is 47.30, and the indicator is included in the green zone. Traditionally, in bear markets, this was a signal of the beginning of the accumulation phase near the absolute price lows for BTC (blue vertical lines). If this pattern repeats itself again, the market may enter a multi-month accumulation phase, and the bottom for bitcoin has already been reached or is about to be formed.
A what farther
Crypto trader @nihkalowz shared with readers a weekly graph of the coin with the applied candles of Heikin-Ashi (Heikin-Ashi). In his opinion, from the beginning of 2021, the structure of the price pattern is represented by a bullish “megaphone”, the furnaces of which expand over time, like the expansion of the “wedge” pattern.
BLX Bullish megaphone https://twitter.com/nihkalowz
The trader has identified two levels of support to base the fourth wave, which he believes is nearing completion. It’s $28,500 and $25,000. If this scenario is correct, then the next step of BTC may be a move towards resistance to historical highs around $ 64,500 and $ 69,000. It is also important to consider a significant reversal line of $ 42,000 (blue color).
Meanwhile, on the short-term 4-hour chart, you can see a bullish price breakout from a symmetrical triangle. This pattern dates back to the May 12 lows, and its technical target is the $35,000 area. It coincides with the CME gap of May 6-9. If this breakthrough turns out to be false, and then bitcoin makes a bearish breakout of the pattern, then the target of the bears will be the area of $ 24,500.
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