Last week we said:
Bearish technical indicators but bullish divergence paints a hopeful picture for Bitcoin. A successful hold of the $40-42k demand zone is setting up a potential retest of the key $48k level for BTC – which represents both the daily 200 SMA and the weekly 50 SMA.
Bullish divergences were pointing to a possible retest of the $48k level, but after failing to break through the local $45k resistance – BTC has retraced to support. Let’s see if we can identify S/R levels for the week.
Bitcoin Price Analysis
BTC has fallen below the 4H 50 SMA, which will now act as a local resistance. This level is just under $43k.
Adding RSI to our 4H view, we can see that RSI is currently trading neutral. There may be a bounce forming on the RSI indicator – which will be confirmed or rejected in the next 24h.
The Stochastic indicator also suggests that we may be seeing an incoming RSI bounce from this level to test the local $43k resistance.
The Daily chart does not look great. A bearish cross of the 50 SMA below the 200 signals an incoming “death cross” indicator in the coming weeks / months. Local resistance here is signaled by the 50 SMA which is at $47.5k.
The RSI and Stochastic RSI indicators do not look great on the daily timeframe as well – and seem to show a mixed message. The RSI is close to oversold, but the Stochastic is indicating we are due for an RSI drop. It will be interesting to see what direction is confirmed in the next week.
If we break up – expect to test resistance levels. If down, we will test the bottom of our support range.
The weekly chart seems to indicate we will test the 100 SMA level (currently at $31k) but that is only if we break below the $40k demand zone and close a weekly candle below that level. Resistance would be found at the 50 SMA (about $48.5k).
Long-term RSI indicators paint a bullish divergence. The Stochastic shows a strong bounce may be imminent (the last time this indicator signaled, BTC found a new all-time high). Look for the weekly Stochastic to bounce back into the “blue” zone for confirmation.
Bitcoin Investor Sentiment
Sentiment remains extremely fearful – signaling we are near the short-term bottom of any bearish channel. Sentiment must improve for the beatings to continue.
Overall outlook is bullish from a technical indicator perspective. Resistance levels are lowering, but bullish divergences are present on long-time frame views. The $40-42k support level is critical. If BTC closes the week below $40k, it’s down to lower demand zones. Likewise, if BTC breaks back above $43k, it will likely test $45k, and if it breaks $45k, it will likely test $48k.
- $40-42k (Demand)
- $37k (demand)
- $31k (Weekly 100 SMA)
- $43k (4H 50 SMA)
- $45k (4H 100 SMA)
- $47-48k (Daily / Weekly Resistance)
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