/latest/2020/01/bitcoin-ready-to-break-7-month-downtrend-resistance-price-analysis/
As much of the Bitcoin (BTC) market shakes off the holiday haze and gets back to business, the leading crypto is still digesting the large move up that came approximately during the first full week of the new year. This move has stabilized for now just above $8,000, and an important decision point may come this week – a decision that will set the trend for 2020.
Starting on the weekly, we easily note the huge bullish candle from last week, which launched Bitcoin past the 55 and, briefly, the 21 EMAs on respectable volume (Bitfinex exchange). Unfortunately for Bitcoin bulls, the leading crypto lost the 21 EMA before the candle closed, just by a little. It is somewhat likely that the range outlined by the 55 and 21 EMAs could make up this week’s trading range; but in any event, the retaken 55 EMA must be defended (at about $7,850) this week for Bitcoin to preserve this new uptrend.
The histogram here is looking excellent for the bulls, with last week closing with a huge uptick in bullish contraction of the indicator. This means that the EMAs are rapidly collapsing back into a positive configuration; and indeed, we see the 8 EMA about to cross over the 55 this coming week if the trend is maintained.
On a more expansive weekly chart, we can see that Bitcoin is nearing the top of a broadly downtrending structure. This downtrend has been in play since July 2019, and we are all simply waiting to see what a test of the top of this structure brings: another rejection, or a break hard to the upside.
It is important to note that we are probably not even at the point of testing, yet (although everyone draws this same chart a bit differently): getting through this week safely above the 55 EMA will provide the space for that retest in the following weeks – unless of course we see a hard break up during the coming week.
Moving to the daily chart, we see that the key local level is at about $7,800 – where the 55 EMA sits on the weekly chart. This area is the top of the previous local structure, and it has already been retested from above late last week, which culminated in a bullish engulfing candle. This support may actually imply a final break up to the top of the larger channel, depicted above, to about $8,700.
We notice on this chart that volume is rapidly falling off, which suggests a potential end to a period of consolidation (around $8k). The short term trend still looks to be up, so we might consider a move to the critical $8.7k area slightly more likely.
This week will be important for Bitcoin, in setting the trend for 2020. The leading crypto is just on the edge of breaking a massive seven-month downtrend; or, likewise, of adding to it. We could find out this week which one it is.
The views and opinions expressed here do not reflect those of CryptoGlobe.com and do not constitute financial advice. Always do your own research.
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