- Bitcoin has rebounded from support at $3701 and is now battling the $4000 handle.
- Support moving forward – $4001, $3851, $3701, $3664, $3468, $3352, $3228, $3000.
- Resistance moving forward – $4215, $4342, $4576, $4710, $4877, $4931, $5000
Bitcoin has seen a price hike totalling +6.54% over the past 24 hours of trading, bringing the current trading price to around $3989, at the time of writing. The cryptocurrency has now seen a relative period of stability over the past 7 trading days where price action has moved by a small +0.31% over the mentioned period.
Where is Bitcoin ranked?
Bitcoin still remains the dominant cryptocurrency as it remains ranked in 1st position whilst it holds a $68.33 billion market cap valuation. The 68 month old project has seen a precipitous -40.85% price plummet over the past 90 trading days and is now trading at a value that is 79% lower than its all time high price.
Let us continue to take a look at BTC/USD over the long term to gain an overview of the market behaviour.
Long Term Bitcoin Analysis
BTC/USD – LONG TERM – DAILY CHART
Since our last Bitcoin analysis, a while ago, we can see that the market dynamic has changed significantly. During the recent Bitcoin Cash hard fork, the market slipped aggressively and had proceeded to fall through the long term support level at the $6000 handle.
The market continued to slide throughout November 2018 and December 2018 until a form of support was found at a medium termed downside 1.618 Fibonacci Extension level (drawn in blue) priced at $3228.
After price action had reached this level of support, the market reversed and rebounded. Price action is now trading just below resistance at the $4000 handle.
Let us continue to analyse price action for BTC/USD over the short term and highlight any potential areas of support and resistance moving forward.
Short Term Bitcoin Analysis
BTC/USD – SHORT TERM – 4HR CHART
What’s been going on?
After rebounding from the aforementioned support at $3228, the market proceeded to rally substantially during the second half of December 2018.
We can see that the market continued to surge until it reached resistance provided by the bearish .886 Fibonacci Retracement level (drawn in red) priced at $4342. This Fibonacci Retracement is measured from the last peak placed toward the end of November 2018 priced at $4488 to the low placed during December 2018.
Where are we now?
After reaching this area of resistance, BTC/USD rolled over once again and began to retrace. Price action continued to fall until reaching support at the bearish .382 Fibonacci Retracement level (drawn in red) priced at $3701.
After rebounding from $3701 BTC/USD continued to rise once again and is now trying to tackle and break above the $4000 resistance handle as the market currently rests at the bearish .618 Fibonacci Retracement level (drawn in red) priced at $4001.
Where can we go from here?
If price action for BTC/USD can close above $4000 today we can expect the market to continue to climb higher. In this case the market will meet immediate resistance toward the upside at the bearish .786 and .886 FIbonacci Retracement levels (drawn in red) priced at $4215 and $4342, respectively.
If BTC/USD can continue to climb above $4342 and create a new December 2018 high we can expect further higher resistance to be located at the long term bearish .382 FIbonacci Retracement level (drawn in blue) priced at $4567. This long term bearish Fibonacci Retracement is measured from the high seen during November 2018 to the low seen during December 2018.
IF the bullish pressure can continue to drive BTC/USD above the $4567 handle further higher resistance can then be expected at the short term 1.272 and 1.414 Fibonacci Extension levels (drawn in orange) priced at $4710 and $4877, respectively.
What if the bears push the market lower?
If the bears regain control of the market momentum and begin to push price action lower again we can expect immediate support toward the downside to be located at the bearish .5 and .382 Fibonacci Retracement levels (drawn in red) priced at $3851 and $3701, respectively.
Further support below $3701 can be then located at the short term .618 and .786 Fibonacci Retracement levels (drawn in green) priced at $3664 and $3468, respectively.
IF the market continues to penetrate below the $3400 handle we can expect more support beneath to be located at the .886 Fibonacci Retracement level (drawn in green) priced at $3352 followed by the downside 1.618 Fibonacci Extension level (drawn in blue) priced at $3228.
What are the technical indicators reading?
The RSI is trading above the 50 handle which indicates that the bulls are in control of the market momentum. IF the RSI can remain above the 50 handle we can expect the short term bullish run to continue further higher.
The 7 day EMA (blue moving average) and 21 day EMA (purple moving average) have both crossed above the 100 day SMA (black moving average) which indicates a strong moving average crossover bullish signal. If these moving averages can continue to diverge away from each other over the next few days we can expect BTC/USD to continue to travel higher still.