Bitcoin (BTC) Technical Analysis: Altcoin Season Forces BTC Sideways, Will it Break $4,000 Soon?
Bitcoin has taken a backseat in the market over the last week as altcoins enjoy a season in the sun. BTC is currently up a mere 0.30% against the US dollar over the last 24hrs while other coins in the top 10 are recording 2-7% gains.
The exodus of traders from Bitcoin over to altcoins has resulted in the #1 cryptocurrency pushing sideways, as volatility drops to uncharacteristically low levels. For now BTC remains range bound between two key fibonacci retracement levels; the 0.5 level at $3,850 and the 0.618 fib level at the psychological $4,000 resistance.
Breaking over this key price point has proved to be difficult for BTC bulls over the last two week and is likely to continue posing as a solid resistance until trading volume and volatility increase.
On the 1D BTC/USD chart we can see that the asset has been tracking inside of a bullish ascending triangle pattern since December last year, between a strong uptrending support and a flat resistance along the 0.786 fibonacci level at $4,220.
So far BTC has tested the pattern resistance 4 times with little success, and found itself along the uptrending base support twice. The 0.786 fib level is the second major resistance for BTC after the $4,000 mark, and will need significant bullish to drive BTC over it.
Looking at the 1D chart indicators we can see that although volatility has slackened off considerably, a number of signals are starting to appear that suggest BTC may be heading bearish in the short-term:
-The indicator line on the RSI is starting to drop;
-The 5 EMA is beginning to bearishly diverge below the 11 EMA;
-There’s a bearish crossover on the MACD indicator;
-The indicator line on the Chaikin Money Flow has crashed through the zero line;
-The Aroon Up line is beginning to arc towards the Aroon Down line;
-Parabolic SAR dots are still hovering above the price action;
-There is a long wick above the current 1D candle as bears continue to overpower the intraday buying momentum.
From this we could expect to see BTC fall back on to the first main support at the 0.5 fibonacci level ($3,850) before recovering, or if selling pressure ramps up, maybe drop down on to the weak support at $3,650.
Ultimately, Bitcoin’s short-term prospects for now are likely to remain pivotal on the current altcoin frenzy that’s taking place in the market. If the focus is able to shift back towards Bitcoin soon then we could see an early breakout over $4,000. However, if focus remains on altcoins for the rest of this month, then its likely that Bitcoin will continue to unravel in price.
Bitcoin (BTC) Price Targets
All ROIs are calculated from the asset’s current value at $3,940 (AToW).
Resistance 1 (BLUE): 0.618 fibonacci level/ $4,000. (1.52%)
Resistance 2 (BLUE): 0.786 fibonacci level/ $4,220. (7.11%)
Support 1 (GREEN): 0.5 fibonacci level/ $3,850. (-2.28%)
Support 2 (GREEN): Weaker support/ $3,650. (-7.36%)