Which trendline are we talking about?
Just to be clear, here is a daily chart of the above-mentioned trendline that most traders and investors are currently following on Bitcoin.
Crucial trendline for Bitcoin, Source: Author´s analysis, tradingview.com
After its price dumped down, Bitcoin has been only moving down alongside this trendline and MA21. There has not even been any kind of potential trend reversal yet. Will that change?
Can a shorter timeframe tell us more?
In here we can even include a resistance level around 39 139 USD. Looking at all the hurdles that Bitcoin has ahead itself, we can see that it is not going to be easy for the biggest cryptocurrency:
- Main trendline from the daily chart.
- MA21 on the daily as well as 4H chart.
- Resistance level of 39 139 USD.
- Zone resistance levels of 39 500 – 41 300 USD.
That means that even if we break the trendline, we would immediately be in the strong resistance zone. I personally believe that the break of the trendline is important, but I do not think that it will necessarily mean that we are going straight up. Yet, it can be first sign that we are at least getting some traction.
40 000 USD as a strong resistance
There is also a psychological strong resistance in the form of 40 000 USD. If we look back at the price action for the past year, we can see that this level has been one of the major zones of bounces and is very important. Thus, I will be much more bullish if we can break and stay above this level.
Bitcoin 40 000 USD resistance, Source: Author´s analysis, tradingview.com