It’s All About $7,400 for Bitcoin Price as a Big Move Is Now Imminent

Bitcoin News

Bitcoin (BTC) closed the week slightly above $7,500 up 1.56% ($115), which marks the first positive week since the close of the first week of August. Today Bitcoin touched a high at $7,660 following and a low at $7,370 with most of the price action taking place in the second half of the day.

The 24-hour losses listed in the chart below show that the wider market has followed suit with Ether (ETH) trading back around $150 and XRP at $0.225.

Cryptocurrency market daily view. Source: Coin360

Cryptocurrency market daily view. Source: Coin360

Weekly chart

BTC USD weekly chart. Source: TradingView

BTC USD weekly chart. Source: TradingView

Bitcoin closed the week back above the 50 and 100 weekly moving averages (WMA), which at the time of writing are now crossed bullish. This typically occurs in advance of bull markets in previous Bitcoin cycles. 

The current price action is taking place off the back of two green weekly candles and this means Bitcoin is being supported above key moving averages — that while crossed bullishly — remain directly below the weekly resistance at $7,600. 

Selling volume has been relatively flat as of late and is in decline across recent weeks overall. The moving average convergence divergence (MACD) histogram is showing a higher low, which is encouraging for the bulls. But the MACD itself is below zero, which is bearish. 

It will be critical for the bulls to push the price of Bitcoin across $7,600, which is currently being compressed and reclaiming the range above it will provide a clear sign that the overall downward trend is starting to reverse. 

Daily chart

BTC USD Daily chart. Source: TradingView

BTC USD Daily chart. Source: TradingView

The daily Bitcoin chart shows that Bitcoin is trapped in a local range defined by the lows at $6,500 and highs at $7,877. The price action has formed an incomplete Adam and Eve pattern, which can be interpreted as a bottoming pattern. 

The pattern is also supported by the middle of the range at $7,189, which adds weight that the pattern is valid, but at this point “Eve’s cup” remains incomplete and would need out to the upper $7,000s to be complete. 

If this classical charting pattern is to play out, the measured targets would be $9,250 and the 1.618 Fibonacci extension level of $8,700, which also coincides with the resistance of the 200 and 100-day moving averages (DMA) respectively. 

Slightly below this — and perhaps of more immediate concern for the bulls — would be the point of control at $8,180 and the 50-DMA, which would be a tall order to reclaim on the first attempt.

BTC USD Daily chart. Source: TradingView

BTC USD Daily chart. Source: TradingView

So far today, Bitcoin failed to hold above the key $7,600 weekly resistance level, which has consistently brought sellers to the market. The MACD remains crossed bullish. But it is showing signs of momentum loss as a result of the net sell-off today. The relative strength index (RSI) is also hard up against the rising trend where it finds itself but is also not far away from breaking out of its horizontal resistance.

Therefore, momentum indicators on the daily timeframe are at a pivotal point but not yet conclusive in terms of a direction.

4-hour chart

BTC USD daily chart. Source: TradingView

BTC USD daily chart. Source: TradingView

The 4-hour Bitcoin chart shows that the bears also hold onto the price and rejected the breakout attempt in the second 12-hour candle of the day. Bitcoin is being narrowly supported by diagonal support having now also a clear diagonal resistance. The center of this narrowing range is the point of control where most volume has been traded at the given price. 

Bullish price action would see the point of control at $7,500 being turned into support and consistently being closed above, which has yet to occur. Should this fail to happen and Bitcoin is unable to continue higher, a break down to the middle of the range of $7,100-$7,200 could occur and this would likely be the first stop. 

Failure at this level would open the door to prices below $7,000 with a reasonably high probability of $6,500 being retested. The MACD is crossed bearishly above the zero line — meaning that Bitcoin is still bullish overall but there are signs of a momentum shift. 

1-hour chart

BTC USD daily chart. Source: TradingView

BTC USD daily chart. Source: TradingView

The 1-hour Bitcoin chart shows that BTC/USD traded below the local lows at $7,387 before quickly trading back across candle closes of $7,415. This may be indicative of a stop run in both directions as the same occurred above $7,600. 

This type of price action normally precedes a more definitive move for the market as we saw last week when similar action occurred. Closing with support above $7,600 will be key for the bulls and closing below this level and finding resistance at $7,400 will be bearish. 

Big move brewing for Bitcoin price

Bitcoin bulls are grinding the price higher on a weekly timeframe but the trend on a macro level remains overwhelmingly to the downside.

A move appears to be in the works and expansion out of the range to test resilience above the old weekly support at $7,600 will be the initial task for the bulls. Meanwhile, the bears will have their sights set on a retest of $6,500.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Products You May Like

Articles You May Like

Here’s what new college graduates need to know about their federal student loan payments
36% of Americans think real estate is the best long-term investment. Here’s the easiest way to get started
Ripple CTO Sends Crucial Warning To Community – Here’s What It Is
Ripple CTO Responds To Rumors That The Crypto Firm Is Abandoning XRP
Synapse bankruptcy trustee says $85 million of customer savings is missing in fintech meltdown

Leave a Reply

Your email address will not be published. Required fields are marked *