Last week we said:
Fundamentals for Bitcoin are incredibly strong and continue to grow. Bitcoin certainly appears like it is heading to become the world’s reserve currency. On lower time frames, BTC is showing signs of bullish divergence, and is confirming higher support levels. Unless a black swan event rugs the market, I expect BTC to continue showing signs of strength.
We had also identified support zones above $40k, which held over the past week. Since our last article, BTC has indeed risen significantly to $47.4k (at time of writing). As the price grows, new bullish indicators are visible on the charts. Let’s see if we can identify our support and resistance zones for the week!
Bitcoin Price Analysis
On our 4H Chart, the moving averages are all firmly in a bullish configuration – with the 50 SMA > 100 SMA > 200 SMA. BTC has also rocketed past the key resistance zone of $46k, indicated by the red zone to the left of the chart. This was our historic resistance zone that acted as a top in BTC’s last two attempts to break out. 4H 50SMA support is now at $43.4k.
The RSI is heavily overbought and Stochastic is topping out. This indicates we may see a short term pullback.
On the daily, the moving averages are still bearish but we can see the bullish divergence – as the price is > the 50 and 100 SMA, and approaching the 200 SMA. The Daily 200 SMA will act as a major resistance zone at $48.2k.
On the daily time frame, the RSI is just reaching the overbought zone and the stochastic is starting to top out. Again, this means we will likely see a short-term pullback. It also means it is unlikely that the $48.2k resistance is broken on the first try. This is a fractal pattern with what we saw on the 4H chart.
On the weekly chart, BTC is just breaking through the 50 SMA resistance at $45.6k. This is a critical resistance zone. If BTC manages to close the weekly candle above this key zone, it would appear that the bull market is back on in full force. Since BTC is above it (now), $45.6k is a local support zone.
Bitcoin Investor Sentiment
After months of fear and FUD, Investors are finally greedy again. Note: sentiment has not yet reached “Extreme Greed” so it would be premature to call this a sell signal.
Bitcoin Fundamental Analysis
Glassnode data analyst Negentropic says that this BTC move is led by “spot” demand. This is in contrast to some moves which result from leveraged trading. Spot demand means new money is entering the space, along with high-conviction buyers who are purchasing for the long term. Negentropic says that historically, this has led to sustained moves. Bullish.
Conclusion
BTC’s strong fundamentals continue, and price action is looking increasingly bullish. On low timeframes (such as the 4H and Daily) it looks like BTC may need a pullback to confirm local support before continuing. On the weekly, BTC looks ready to rocket. If the $45.6k zone holds, this appears to be the beginning of a new bull market.
Support Zones:
- $45.6k
- $43.4k
- $40.8k
Resistance Zones
- $45k
- $48.2k
- $50k (psychological)
Not investment advice. Do your own research.
