Last week we said:
Bitcoin seems to be making a break upward. The daily close over the next few days will be critical to see if the $40k zone can hold as support. A bullish divergence RSI pattern is forming, with fractals showing the same pattern on both low and high time frames. Strong accumulation patterns and reduction in sell pressure confirm this bullish bias.
BTC indeed broke upward, and moved to test the $45k resistance just as we thought. However, upon moving down for a retest, the $40k zone did not hold – which caused BTC to fall back to the $38k support beneath.
Let’s take a look at the charts and see if we can predict BTC’s next move.
Bitcoin Price Analysis
The moving averages on this timeframe are not telling us much. BTC has been choppy for a while, moving between support (green) and resistance (red) for weeks. Current established support is at $38k on this timeframe, with resistance at $45k. I also expect the 200MA to act as resistance, currently around $41k.
After trading back down to our $38k support zone, the RSI and Stochastic were both ready for a bounce. We can see now that the RSI is oversold and moving up, supported by upward momentum from the Stochastic. Bitcoin will probably retest the $40k zone in the coming days.
On the daily chart, it’s clear that moving averages are in a bearish configuration. However, this is a lagging indicator. This does tell us where resistance zones will be found, however. 100SMA resistance is at $44k, and 200SMA resistance is at $49k.
On the daily the RSI is neutral and Stochastic is moving down. We may see one final push down to confirm support before retesting resistances.
The weekly stochastic bounce is continuing, and RSI remains oversold. Resistance is at the 50SMA around $46k. This creates a resistance zone between $45-46k that BTC will need to break to really confirm bullish momentum.
Bitcoin Investor Sentiment
BTC is back in “extreme fear” mode after dropping yesterday. This is bullish and confirms a rising sentiment window, since last time this indicator was in “extreme fear” was when BTC was around $34k.
Bitcoin Fundamental Analysis
Glassnode information shows that Institutions are once again accumulating BTC via Greyscale. Institutional demand was a big part of what led to the 2021 bull run, and will likely be a big part of the next. Accumulation shows that demand for BTC is continuous and rising despite economic uncertainty.
Conclusion
Finding support at $38k was critical. If $38k support fails, BTC will test the $35-36k zone. If it holds, BTC can retest $40k and eventually $45k. On larger timeframes, such as the weekly, BTC looks very ready for a bounce. This is also the case on the 4H. However, on the daily – a push downward looks more likely.
Support Zones:
- $38k (local)
- $36k
- $33k
Resistance Zones
- $40k
- $45k
- $49k
Not investment advice. Do your own research.
