Bitcoin is trading inside a descending wedge. It has been trading without significant volatility for the past three weeks. In a long-term view, we believe we are approaching the bottom. We do not believe the price will break down from this descending wedge.
- The cross between the 100- and 200-day moving averages (MA) will determine the direction of the trend.
- Currently, the MAs have made a bullish cross.
- There is support at $8000 and $8130.
- Bitcoin is following a short-term ascending support line.
Bitcoin Daily Analysis
The Bitcoin price is trading inside a descending wedge.
The short-term 10- and 20-day MAs are in line with each other, so every short-term price movement causes a bearish or bullish cross.
On the contrary, the 100- and 200-day MAs hold more importance. At the current time, they are both above the price and close to making a bearish cross.
These two MAs have been instrumental in determining the direction of the trend.
The bearish cross in April 2018 confirmed that we were in a downtrend — which lasted until April of the next year.
In my opinion, we will not make a bearish cross.
It is much more likely that we have a rejection of the cross which is succeeded by upward movement, similar to what we had in May and December 2016.
Looking at the short-term, we can see several things.
First, the price is following an ascending support line and has been doing so since September 30. The line is currently slightly above $8000.
Also, there is one support area at $8130, which previously acted as a resistance.
The closest resistance area is currently at $8400.
Currently, we are expecting the price to drop to the support area before resuming its upward movement.
A breakdown below the short-term support line would likely take us to the support line of the descending wedge.
Good luck and happy trading! For yesterday’s analysis click here.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
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