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Bitcoin Friday: Technical Analysis of Bitcoin

Bitcoin made a more significant correction last week. However, this correction was already to be expected. So what has changed since?

Daily chart

I still have 2 strong supports marked on the daily chart, which have not been tested yet. We can see that after last week’s slump, this week, Bitcoin has been growing. I do not think that this growth would lead to a new maximum – quite the opposite. I think this whole growth is just retracement after which Bitcoin will fall further. For me, the level of about $ 45,000 seems to be the strongest value. To make matters worse, weekly MA21 also oscillates around the level which was key for the entire bull market in the years 2016 – 2017.

I don’t think this would be the end of the correction. I think Bitcoin will still continue further to the new low, but it will take a while. Bitcoin has been growing steadily since the price of $ 10,000 and has closed a green candle for 6 consecutive months, which is a lot even for Bitcoin.

Bitcoin weekly chart Figure 1: Bitcoin on a weekly chart Bitcoin daily chart Figure 1: Bitcoin on a daily chart

4H chart

On the 4H chart, the price arrived at the support, which was between $ 52,420 – 52,983. However, I admit that I now see two possible scenarios on the 4H chart, both of them having 50% probability. The first possible scenario is that price will test again at levels of $ 56,189 – 57,452. In that case, I might expect a new HIGH, but we would not be able to overcome this resistance. That would be final for us. As soon as we came to this resistance, there would be a decrease to the mentioned levels from the daily chart. The second possibility is that Bitcoin will no longer test this resistance and go straight down. As a first stop, the level should be $ 50,739 – 51,411.

Bitcoin on a 4H chart Figure 1: Bitcoin on a 4H chart

Conclusion

If you don’t know what to do with Bitcoin, try to take a look at the daily chart. In my opinion, it speaks very clearly. We see noise in the 4H chart and it is more difficult to recognize other movements in this timeframe. Globally, however, I think we will witness a new LOW on the BTC.

Jakub is a crypto trader and founder of Trader 2.0 project, which helps hundreds of traders from central Europe to understand cryptocurrency trading and its challenges. Jakub not o...

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