Hot Topics
Coin Gecko

Advertisement

Advertisement

Bitcoin (BTC) Likely To Close The Month Below Strong Resistance Levels

 
Bitcoin (BTC) Likely To Close The Month Below Strong Resistance Levels
Breaking News / Bitcoin / Analytics

Bitcoin (BTC) is trading below key resistance levels and is expected to close the month below these levels. If we look at the monthly chart, we can see that BTC/USD formed a wick to the body of the all-time high candle of December, 2017 before it topped out and started to decline. The price ended up falling a lot aggressively and is now trading below the important 61.8% fib retracement level as well as the resistance at $11,621. It is important to realize that if the price ends up closing below this mark, we are likely to see a sharp decline as early as next week. The long term trend line support that was broken in November, 2018 has now become trend line resistance and as we saw just recently, the price faced a strong rejection at this trend line. 

At this point, everything is against Bitcoin (BTC) on the technical as well as fundamental front. However, the bullish euphoria has yet to die down. Even though the price started the day in red, the Fear and Greed Index is up four points from yesterday hovering around 78. Sentiment on Crypto Twitter also remains optimistic as investors believe that this may not be the end of the bullish advance we have seen for the past five months straight. It is unusual, even for Bitcoin (BTC) to go up for five months in a row without any correction in between. We saw this only once during the last bull run but even the price left a long wick to the downside. This time, the monthly candle has formed a long wick to the upside which is very alarming as it indicates that the price might have topped out here. 

On the smaller time frame, BTC/USD continues to show weakness. There was an ascending triangle that we saw form on the chart in the past two days but it has now been invalidated. It appears that BTC/USD has just broken below a bear pennant but has found support at the 50 EMA. We can also see a downtrend on the RSI and the price has yet to climb back above the 38.2% fib retracement level. It is likely that we will see BTC/USD rise again to test the broken trend line support as resistance. If it faces rejection there, we might see it decline for the rest of the day. 

Bitcoin (BTC) looks primed for a bearish reversal on larger time frames. This is bad news for Bitcoin (BTC) but it is devastating news for altcoins that might end up breaking key support levels against Bitcoin (BTC) during the next downtrend. We can expect volatility to peak around the monthly close as this is the most important month for Bitcoin (BTC) since the beginning of the year. BTC/USD left some gaps on Bitcoin CME Futures on its way up. Next month would be a good time for those gaps to get filled. It is important to realize that even if the price falls hard and completes a short term correction, there is no reason to think that this bear market is over until Bitcoin (BTC) closes above the trend line support turned resistance on the monthly time frame.

You can share this post!