Bitcoin (BTC) is in the do or die situation. The price spiked at $7,300 just now but trouble looms on the horizon. Therefore, in order to decide the next trading steps, we present one of our briefest Bitcoin chart technical analysis.
We decided to take a look at the Coinbase BTC/USD 6-hour chart since it exposes the formation we spotted best. In the chart below, you will see the perfect rising wedge formation Bitcoin started to move inside on March 12th. The starting price was $3,800. However, Bitcoin today reached almost 100% rise since then.
Nevertheless, the same chart shows that the volume is shrinking as traders, obviously, still didn't regain enough trust despite the rising price. This is the first sign of a possible reversal. The RSI indicator doesn't reveal much as there are no divergences to look for. Yet, the readings failed to reach the overbought area three times in a row while the price constantly rose.
On the other hand, the MACD indicator does show the tiniest of the divergences. However, that, by itself, is not enough to definitely call for a reversal.
Nevertheless, the most worrying factor is the mentioned volume which, in the end, could send the price spiraling down towards $4,000 again.
Rising wedge is, naturally, a bearish reversal formation, and for it to be complete, BTC has to hit the third higher high at approximately $7,400. Higher lows, on the other hand, are all here as expected:
If Bitcoin truly does the expected and bounces off the rising resistance, it has a few levels of support available.
All the mentioned higher lows are there to be tested. However, when we talk about the risin wedge formation, the science of trading tells us that the decline is often equal to the opening of the wedge. Therefore, if we take that into account, if Bitcoin braks down from the wedge, we caould very well see it at $4,000 until the end of April.
If BTC starts slipping, the sturdiest support should be provided by the $5,900 level, which provided the same two times during the last month.
At the end of the day, we have to say that we are, currently, 70% mid-term bearish on Bitcoin for all these cumulative indicators. Despite that, whichever way you decide to trade, be sure to set tight stop-loss orders since this is the time to practice the highest level of caution.
You should look elsewhere for investment advice since this isn’t it. Even if it looks like it, it’s not. Cryptocurrencies are extremely volatile and risky speculations. Always do your own research. Consider consulting an investment professional prior to investing your money.
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