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2020-1-3 13:34 |
\nBitcoin Price Highlights The Bitcoin price has fallen to a minor support area near $7150. It is nearing the completion of a head and shoulders pattern. It is facing close resistance from the 100- and 200-hour moving averages (MA). The price is trading inside a short-term descending wedge. Minor Support for Bitcoin
The Bitcoin price continued its descent to the minor support area, which is found at $7150. The next support areas are found at $6900 and $6650.
The 100- and 200-hour MAsare very close to making a bearish cross and are offering very close resistance to the price. If the Bitcoin price were to bounce upward from this minor support, it would be very likely that it would stall once it reached the MAs near $7250.
It is possible that the Bitcoin price has created a head and shoulders pattern (H&S). However, the pattern is not exactly textbook, mostly because of the differences in duration between the left and right shoulders.
A perfectly textbook pattern would have the yellow arrow acting as the right shoulder. So, it is entirely possible that the pattern was invalidated when the price bounced on the minor support area (upward yellow arrow).
However, since the technical indicators also give a bearish outlook, we are not rushing to invalidate the bearish H&S.
Descending TriangleIn the long-term, the Bitcoin price has possibly created a descending triangle. While the support line has not been validating sufficient times, the descending line is certainly being followed.
However, there is a slight bullish possibility. The price has created a long lower wick near the support area at $7150. The two previous times this occurred, on December 16 and 23, the price did not break down from the minor support, rather began an upward move.
In the short-term, it seems as if BTC has created a descending wedge, which is a bullish pattern. The presence of bullish divergence fits with the long lower wick hypothesis that the price should make an upward move. If so, the move is likely to end near the bearish cross of the 100- and 200-hour MAs.
ConclusionThe Bitcoin price has possibly completed a head and shoulders pattern, a breakdown from which could take it towards the range lows at $6600. However, a short-term bounce is likely to occur prior. A movement above the 100- and 200-hour MAs would invalidate the H&S possibility.
Good luck and happy trading! For our previous analysis, click here.
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