Bitcoin Technical Analysis: (BTC/USD) Looking Bullish In The Short-term But How Long Can It Last?
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Bitcoin appears to be back on the move again, enjoying a 6% gain over the past 24hrs after rebounding off the 0.786 fibonacci level. Now it faces a strong resistance at $7,400 having already failed to test this level last week, in the previous bull run.
If it fails to overcome this mark for a second time, then it’s very likely we’ll see a further dip in BTC’s performance as well as another bearish double top pattern - the 3rd double top for BTC in 2 months.
Looking into this latest bull run we can see a positive convergence between the two MA’s on the MACD indicator which is heading back up towards the signal line, with the price action well within the RSI channel.
These are both relatively good confirmations that the bulls are still overpowering the bears in the current trend and that BTC, for now, is still likely to edge closer towards $7,400.
Looking ahead of this bull run, other key resistance levels to be tested next can be found at $8,000, $9000 and $9,500 which sits along the 0.618 fib level. There is also a softer resistance line at $8,400 where we might see temporary selling pressure.
While the momentum indicators are currently favouring the uptrend, looking at the chart more closely above, we can see that BTC still tracks well along the descending resistance line. After falling below the $7,400 support line that held up BTC during the first double top crash, it’s now working against the price action in forcing it down. This coupled with decreasing highs and lows, gives us this descending wedge pattern.
If this pattern plays out it could spell doom for a lot of BTC hodl’ers as the consolidation point for this formation is projected at around $4,600 - well beneath that all-important $6000 mark.
This psychological barrier has been the hard support line for BTC, after it springboarded the asset back into form following the month-long downtrend in January.
Many believe that a dip below this level could cause a major panic-sell frenzy throughout the crypto-community and cast Bitcoin’s price down beyond recovery. By the time BTC begins to reverse at this stage, it could be too late.
Bitcoin (BTC) Price Prediction
At the time of writing BTC is up 5.94% against the US dollar and already starting to waiver. The $7,400 resistance is a further 5.3% away from the BTC’s current price so buying sentiment will have to improve if it’s to reach that target before the bears take over.
It appears that the 0.786 fib level is providing essential price action support against the threat of falling below $6000 at the moment, but a 3rd bearish double top might be enough to overcome it if the bulls lose steam. If that happens then we could see a really challenging time ahead for Bitcoin going into Q2.