The price action over the past week played out exactly as we expected. After our article, BTC moved up and re-tested $39k resistance, and failed to break it. After failing this retest, it went down and tested our support zone at $36k, which held and then moved back to test resistance, which broke on this third try. Once the $39k resistance was broken, BTC has been rocketing upwards and is moving to test resistance at $45k!
Let’s see if we can identify support/resistance zones for the week.
Bitcoin Price Analysis
The 4H chart looks very bullish. A rising channel, moving averages changing to set up a golden cross, inverse head and shoulders pattern (a bottom signal) and a “Bart” pattern are all signaling that the tide has changed to bullish in the short term. A true test will be if BTC can break resistance in the mid-$40k zone.
This move establishes new support at the 4H 200 SMA ($40k).
The RSI is heavily overbought and the Stochastic indicates an incoming momentum change, so I do not expect BTC to break this resistance zone upon first try. A consolidation period is needed for BTC to regather its strength and cool off.
On the daily chart, we can see BTC is facing resistance at the Daily 50 SMA (currently at $42.8k). If BTC closes the daily candle above this level and it is confirmed tomorrow, this area could flip to support. That said, it has not been confirmed yet and will act as resistance until confirmed support.
An impending death cross can be seen as the 100 SMA is about to cross below the 200. This death cross could be invalidated if BTC breaks the $45k resistance.
The RSI is heading toward overbought territory, and the Stochastic looks ready to change direction on momentum, indicating that BTC will need to move down and confirm support levels in the short term before continuing its upward move.
The weekly chart shows moving averages are still in a bullish configuration despite the last few months’ bear market. Weekly 50SMA resistance will be tested at about $48k.
This could be the bounce we have been waiting for on the weekly chart. After clocking in at near-historic lows on the weekly RSI, this bounce is reverting back to neutral levels. However, the momentum shift is only just beginning – according to the Stochastic indicator. This appears to be signaling a shift for another bullish wave, which is only just beginning.
Bitcoin Investor Sentiment
Investor sentiment is shifting upward. Once today’s price move is factored into the FGI, I expect that it will be at least “Neutral”. A word of caution here: BTC is roughly in the same price area that it was only a few weeks ago, and the market was extremely fearful at the time. Achieving the same price but with a higher sentiment level is actually bearish because it indicates that the sentiment window is moving down (same price but higher sentiment). Do not expect BTC to rise back to all time highs overnight.
Conclusion
The tide has shifted – at least for now – from bears to bulls, as BTC breaks resistances and confirms new support levels. However, momentum indicators on short timeframes shows that BTC needs to cool off and revert back to mean RSI before continuing past $45k resistance. On the weekly, this appears to be the start of a new bullish wave that should carry for several weeks/months.
Support Zones:
- $40k (local)
- $36k
Resistance Zones
- $42.8k (Daily 50 SMA)
- $45k
- $48k (Weekly 50 SMA)
Not investment advice. Do your own research.
