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When the course makes a face – Since the local top found on November 10, 2021, Bitcoin has fallen by more than 40%. While we were presented with an explosive end of the year, Bitcoin decided to put down its suitcases at $ 40,000. Far from $ 100,000, Bitcoin is struggling to maintain major support. This is the zone defended at the end of September by buyers, it must be defended again so as not to call into question the primary upward momentum.
Have we started again in a downtrend? Do we observe a pause in a bull market in several stages? The king of cryptos has something to play for in 2022, but buyers shouldn’t fall asleep …
The technical analysis of the day is offered to you in collaboration with the Coin trading and its algorithmic trading solution finally accessible to individuals.
Bitcoin: In a tidy weekly, buyers benefit?
As can be seen from the graph shown above, there is three zones important:
- the support at $ 30,000: a support which marked the lowest during the summer of 2021. An area which was widely defended by buyers. This is the lower end of the $ 30,000 – $ 40,000 range.
- the $ 40,000 support: a support that served as rebound end of September. Buyers confirmed this area as support when confirming new bullish momentum by forming higher and higher highs and lower higher and higher (breakout of $ 53,000).
- the resistance at $ 60,000: a resistance that has blocked prices from February to May 2021 then from October to November 2021. An area strongly defended by sellers, it has been resisting for nearly a year.
If we base ourselves on the Dow Theory, namely that an uptrend is marked by a price which makes higher and higher higher and lower lower and higher, the primary dynamics of Bitcoin is weekly bullish. We must find in this fall a lower higher than the previous one. Buyers must defend the support at $ 40,000.
Bearish momentum for Bitcoin if support at $ 40,000 is broken?
This is the question that arises if the medium gives way. If we sit under the $ 40,000 support, it is not necessarily the ultimate signal. Indeed, if we take a step back, we could imagine that the price of Bitcoin is in a tidy with a high terminal at $ 60,000 and an lower limit at $ 30,000.
It should be noted that a dynamic, whether bullish or bearish, is marked by ranges in which buyers (or sellers) pause:
A dynamic is often made up of tidys more or less long. This is how buyers can gain strength (accumulation) or sellers gain the upper hand (distribution). It is quite imaginable that Bitcoin is in a neutral dynamic since the end of February 2021.
In this case, a clear break in the support at $ 30,000 would show a change in primary dynamics. The clear break in resistance to $ 60,000 would mean a continuation of the bullish momentum.
The RSI momentum indicator: Bitcoin on the verge of a rebound?
the RSI is an indicator of momentum very well known by traders. It allows to assess the strength sellers against the strength of buyers. We are looking for dynamic within this indicator, resistances and supports. Since the fall that began in mid-November, the momentum has been in the hands of sellers. It will take several weeks minimum to regain an encouraging momentum.
However, it is interesting to see that the RSI is in the same zone as during the low found in July 2021. It is an area which has acted as a rebound in the past, it is possible that the same is true. for this support to $ 40,000. Subsequently, it will be necessary to find an RSI momentum greater than 50 because this area is currently resisting.
Areas to watch daily for Bitcoin
On a daily basis, Bitcoin is part of a bearish momentum. Prices are trending along the bearish Trendline. The breakout of this trendline on December 21 did nothing because a simple breakout is not enough. We must confirm the break behind the trendline with a resumption of bullish momentum.
Bitcoin is currently stuck in a tidy daily between $ 41,500 and $ 52,000. Be careful not to rush in the event of slight turbulence below $ 40,000 or conversely above $ 52,000. We may be punishing the levers (placed at purchase) under $ 42,000. It is not uncommon to see this in a tidy one side or the other.
Another momentum indicator, the MACD, is powerful in detecting loss of force in a trend. Here there is a potential bullish divergence. You will have to break the black line to confirm this. The bearish movement would lose strength and the buyers would have another chance to regain control. This would show that the $ 40,000 area is doing a good job of supporting and buyer return.
Now you know the situation of the king of cryptos. We must quickly re-enter the range and confirm by breaking the first resistance located at around $ 46,000. It will then be necessary to break the resistance at $ 52,000 for a possible new bullish momentum. We are in an area called the reloading area. It is an area usually very much defended by buyers. The zone should hold and buyers should take the opportunity to reverse the daily downtrend. The weekly primary trend remains bullish but we must keep the $ 40,000 as support if we want to avoid a new test at $ 30,000. If you want to know more about the cryptocurrency market and the levels to watch, you can come and watch one of our recent market analysis videos for the year 2022.
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