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Bitcoin Run Cooling Off, With Plenty of Room to Spare — Price Analysis | CryptoGlobe

Home » Bitcoin Run Cooling Off, With Plenty of Room to Spare — Price Analysis | CryptoGlobe

Bitcoin (BTC) has been on an impressive run in the past week or so, and especially in the past couple of days. During this time, it has applied heavy pressure on the top limits of its long downtrend, a welcome sight for Bitcoin bulls who want a reversal from about seven months of general price decline. Now, just under the point of reversal, there are some signs that buy support is weakening, and it might take some consolidation to break these levels.

We start on a 12-hour chart, and see that bear divergences have shown up on both the RSI and histogram indicators. Based on this, we could well expect a retrace into the blue support area if not lower.

Some possible signs of correction comingBTC chart by TradingView

We can also see the histogram arch accelerating to the downside for a bearish contraction. This retracing would not be surprising given how much gains Bitcoin has put on the chart, and would not take off the table the possibility of an end to the long term downtrend.

For a wider context, we go to the weekly chart and clearly see that Bitcoin is at the top of its downtrending channel; and on the cusp of breaking through it. The convergence of this downtrending limit and the important resistance zone starting at $9,100 will be the area to beat.

Almost there.BTC chart by TradingView

The histogram here looks extremely bullish, especially if it can close the week in this configuration; with a sharp accelerating arch to the upside, and a bullish contraction of the EMAs. Further, the important 21 EMA is holding so far in the week, and as long as this critical level (now at $8,237) is held, the picture remains very hopeful. We must bear this chart in mind when making observations of possible corrections on the short term charts.


Finally, way down to the 4-hour chart, we get a detailed picture of the local market structure. The area anywhere with the $8,400 to $8,150 support zone would be a perfectly acceptable retracement from the local highs; and we can note also that our $8,237 figure – the 21-week EMA – lies just within this zone.

Room to moveBTC chart by TradingView

We can also note that the “golden pocket” Fibonacci zone is conveniently arrayed just below that support zone. There is plenty of room for Bitcoin to cool off here and continue up for an attempt at the low $9k area, if it wants to.

Of course, this is all assuming that Bitcoin will retrace. The current formation looks like a bull flag; and with the indicators cooled off already, the leading crypto could simply decide to take off for another leg up.

In all, Bitcoin is looking great on the charts these days. It has not yet confirmed the end of its long downtrend, in play since about July, but it is not far from doing so. The weekly chart looks bullish; but wary investors would do well to wait until a break of this downtrend is confirmed. We are not quite there, yet.

The views and opinions expressed here do not reflect those of CryptoGlobe.com and do not constitute financial advice. Always do your own research.

Featured Image Credit: Photo via Pixabay.com

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