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Bitcoin Friday: Technical Analysis of Bitcoin

Bitcoin has been moving sideways for some time and its dominance in the crypto market is declining. While Bitcoin has not made a new high in a long time, altcoins are currently going through their rally phase. What will happen next?

Daily chart

On the daily chart, we see that Bitcoin has been going to the side for some time. A rising wedge pattern has been formed from which Bitcoin eventually went down. It was not a fatal and fundamental dump by any means necessary, but rather a classic correction. So Bitcoin has not made a new high in a while and it basically continues to the side.

For me, the two strongest supports are at $ 40,687 and $ 45,216 . After falling out of the falling wedge a harder dump came followed by another growth. Now the price is stagnating. Personally, I think that growth came only as a retracement and a reaction to a decline. I do not think that Bitcoin should go to a new maximum straight from this point. Rather than that, I think that Bitcoin will continue going sideways or will begin descending, hitting all the marked supports on its way down. I am not particularly fond of the whole daily chart. However, this situation suits altcoins and ETH. While the current situation around Bitcoin is kind of boring, altcoins are exceeding their maximums and money is now flowing into them. Of course, this phenomenon will not last forever and will soon turn around again. At the moment, however, we can enjoy the altcoin season.

Technical analysis of Bitcoin - daily chart - may 2021 Figure 1: Bitcoin on a daily chart

4H chart

This chart is no fun at all. Let me put it bluntly, if there was just this chart and nothing else in front of me, I would not be able to read anything from it. There are so many scenarios that can happen that it makes it nearly impossible to correctly assume which one is the probable one. In the chart, we can see the emerging triangle, which belongs to an indecisive pattern. With this pattern, it is really 50:50. Even after looking through the scope of all the basic indicators, it seems that we are still in the neutral zone. The 4H chart will tell us almost nothing. Therefore, it is very important to look at the daily chart, where we see the "bigger picture".

As I mentioned above, Bitcoin is currently stagnating and altcoins are reaching new highs. Therefore, in the following days and weeks, I would pay particular attention to altcoin, because it definitely makes more sense now.

Technical analysis of Bitcoin on a 4H chart _ May 2021 Figure 2: Bitcoin on a 4H chart

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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