After last week’s higher-than-expected CPI came out, Bitcoin dumped heavily and found support at the $19k level. Since finding support, BTC has bounced nicely – reclaiming $20k and now testing the $22k resistance zone. If BTC can hold here, it’s possible that it will also reclaim the weekly 200 SMA – a feat that Ethereum has already accomplished! Will BTC be able to do it?
Let’s take a look at the charts this week and see if we can predict BTC’s next move.
Bitcoin Price Analysis
On the 4H Chart, BTC’s moving averages are all converging and setting up a golden cross. BTC’s price has already broken through the 4H 200 SMA resistance, which is now likely to act as support upon any price retrace. The 50SMA is about to cross over both the 100 and 200, setting up further bullish price action. Support here is at $20.5k.
On the 4H, the RSI is nearing oversold levels but Stochastic is still on the move up. The last two red candles look like a bull flag – meaning the upward price action is not quite over yet. We expect BTC will face resistance around the $22.5k mark.
Even with the recent price bounce, BTC still looks oversold on the daily. We haven’t even crossed the daily 50SMA yet, which will also act as resistance at $23.2k. After this, the next resistance is at $29.2k (daily 100 SMA).
The RSI on the daily time frame is neutral but Stochastic is overbought. This means BTC is unlikely to break the 23.2k resistance upon its first attempt. Support is at $20k which is an important psychological price point.
The weekly chart looks incredibly bullish, as a bottomed-out RSI and Stochastic are both beginning to point upward. The key resistance is the weekly 200SMA (shown in blue above). This key moving average has been a bear market bottom indicator for the past four cycles, and if BTC breaks and holds above it – we could see fireworks on the chart. The key level is currently priced at $22.7k. Watch for a weekly close above this price point this week, as it is a critical pivot point for the market.
Bitcoin Investor Sentiment
The FGI is still reading “extreme fear” showing that negative sentiment is priced into the market. This is bullish. If everyone is fearful, it’s time to start being greedy.
Bitcoin Fundamental Analysis
Glassnode reported in their weekly on-chain BTC analysis that BTC is beginning to test its realized price – another key market indicator that could signal the end of the bear market. In its history, BTC has only traded below its realized price at its deepest bear depth. This could mean that the worst is over. Read more about it here.
Bitcoin is beginning to look quite bullish, and the worst of the bear market appears to be over. BTC is breaking important resistances and setting up new support zones on the 4H, and is testing a key price point in the weekly (200 SMA). With a confluence of resistances around the key area of $22.6-22.7k, I do not expect BTC to break resistance upon the first attempt. However, a key indicator to watch is if BTC breaks and holds above the $22.7k mark on the weekly chart.
Not investment advice. Do your own research.