Bitcoin (BTC) Technical Analysis: Saved By Overlapping Supports, Sideways Trajectory Likely
Bitcoin is starting to show signs of recovering from the recent bear market, with the #1 cryptocurrency now resting along an intersection of overlapping support levels. 2 days ago we saw a visible decline in market sentiment as BTC fell sharply by $150 and the global crypto market capital slid by a further $6 billion. The sudden increase in selling could have been attributed to a whole host of factors, but for now it seems like the ‘digital gold’ will hold along the current support in the short-term.
Diving into the 1D BTC/USD chart we can see that the asset has thrown back onto the previous long-standing resistance and found a new support, after tumbling down from the freak bull run that occurred over 2 weeks ago. Right now BTC sits along a strong trendline support at $6,325 which is intersected with both an uptrending and downtrending support level.
This combined support at the $6,325 level to prop up BTC against further selling pressure and potentially force the asset sideways as volatility starts to return back to its recent low levels.
Looking at a number of indicators over 2hr candles, we get the impression that bears are easing off at the new support and allowing bulls to restabilize the price action.
-The RSI has recovered back into the index channel after BTC fell into the oversold region during yesterday’s sell off.
-On the MACD indicator we can see that the 12MA has now bullishly converged over the 26MA but still remains low beneath the signal line.
-The indicator line on the CMF has been travelling sideways for the last two days as the current trend remains neutral and neither favours a bullish uptrend nor a further bearish decline.
In the absence of any substantial news, BTC will likely continue to oscillate between the $6,325 level and the $6,700 resistance above until something triggers a stronger market movement. We are still waiting to hear an update on the approval of a Bitcoin ETF product from the United States SEC, but general adoption of Bitcoin and blockchain technology has continued to make progress throughout this quarter so far.
If the current support fails at any point then the $6,240 level below will likely be the next strong foothold for BTC bulls to push back from. Lower support levels can be found at the $6,125 and $6,080.
Our top bull target for BTC will continue to be the $6,800 mark, which remains a critical level for this asset to overcome before we consider any higher targets.