Bitcoin Price Showing Hidden Signs of Reversing — Next Target $8.2K
Bitcoin bulls have their sights set on $8.2K as BTC price action shows hidden signs of reversing but the bearish descending trendline remains a serious obstacle to overcome.
This week Bitcoin (BTC) continued to trade within a tightly defined range and at the time of writing the price is flat. The bulls and bears have been throwing the market back and forth with moments of high volatility on the lower timeframes, all of which are often a sign of a larger move simmering beneath the surface.
The wider market remains in a similar position, although some altcoins like XRP have slightly outperformed Bitcoin over the past 24 hours.
Cryptocurrency market daily view. Source: Coin360
Watch the weekly chart
BTC USD Weekly chart. Source: TradingView
Analyzing the weekly chart shows that Bitcoin has fundamentally been locked in a bearish posture for close to six months and this is defined by the downward sloping diagonal resistance.
Major resistance was found at $11,500 and the $9,500 and $7,500 support eventually turned into resistance. Support has now been found at $6,500 which was a critical bullish rejection level in the first half of the year and is demonstrative of a high volume node on the VPVR.
Bitcoin is currently trading up against previous support which has flipped to resistance and the Doji candlestick is a clear sign of indecision in the market as traders are pushing price within a clear range and coming back to the center.
This shows that the bulls and bears are struggling to find a direction. Bitcoin price can either reverse course or find continuation of the previous candle but ultimately, the current price action defines the week to date quite nicely.
Moving averages provide useful insight
The 50 and 100-week moving average (WMA) are in the process of crossing bullish which has only occurred a few times in Bitcoin’s history and has signaled an impending upside move. It is important to note that moving averages do not drive a market, they lag the market but can help to identify macro changes in the market’s direction.
The 200-WMA is situated in the $5,000 range where there is also some historic volume interest at this price range. Many analysts are calling for a retest of the 200-WMA which would likely be a last line of defense for bulls. This would also be unprecedented at this stage in the Bitcoin market cycle.
Generally, volume on spot exchanges has been decreasing through the circa six-month decline which is typically a sign of sellers becoming exhausted as each push lower entices fewer participants to sell.
The moving average convergence divergence (MACD) has crossed the zero line to the bearish side, meaning that the underlying moving averages are now crossed bearishly. However, there is a higher low forming on the histogram which is an unconfirmed bullish divergence.
Thus, on a macro level, it seems as though the market is either at a turning point or it is looking to prepare for continuation; unlike previous weeks, it is a less clear picture.