- Bitcoin price traded higher, and the idea of buying dips in the last technical analysis worked perfectly.
- However, the price remains below the 100-day simple moving average on the daily chart (data feed from HitBTC).
- There is a bullish trend line formed on the hourly chart via the data feed from Bitstamp, which can be seen as a short-term buy area.
Bitcoin price climbed a few points higher before closing the week, and now it looks like forming a short-term support area for more gains.
Buys dips near trend line?
We have been following a nice setup on the daily time frame chart for Bitcoin price. There are both positive as well as bearish signs on the daily chart and data feed from HitBTC. Looking at the bearish signs, the price is below the 100-day simple moving average which has stalled the upside move on more than 3-4 occasions. In fact, there was a spike in Bitcoin price this past week, but the price failed to clear the 100-day simple moving average. The stated MA acted as a barrier for buyers, and prevented gains. The next important bearish sign is the fact that the daily RSI is below the 50 level, which means buyers are struggling to gain pace.
On the other hand, if we look at the positive signs, then there is a bullish trend line formed on the same chart. The highlighted trend line and support area prevented a downside break this past week. We need to keep an eye on the same and check whether sellers can manage to break it or not. Moreover, the price managed to move above the 23.6% Fib retracement level of the last drop from the $470 high to $361 low. However, if buyers need to gain control, then they have to clear the 100-day SMA, then only the path will be clear for a move towards the $450 level.
The next level of interest on the upside if the 100-day MA is breached could be the 61.8% Fib retracement level of the last drop from the $470 high to $361 low. If you are looking to trade in the short-term, then the price is showing a few bullish signs for buyers. There is a bullish trend line formed on the hourly chart via the data feed from Bitstamp, which may act as a buying zone. The price is flirting with the $390 level, which is acting as a short-term resistance area.
If the price moves or corrects lower from the current levels, then an initial is around the 38.2% Fib retracement level of the last leg from the $380 low to $390 high. However, for buyers the most crucial one is around the bullish trend line area, which is coinciding with the 50% Fib retracement level of the last leg from the $380 low to $390 high. Buying dips may be favored in the short term.
Looking at the indicators:
Hourly MACD – The hourly MACD is about to change the slope to bearish, which may call for a short-term correction.
RSI (Relative Strength Index) – The hourly RSI is around the extreme overbought levels, again calling for a correction.
Intraday Support Level – $380
Intraday Resistance Level – $390-95
Charts from HitBTC and Bitstamp; hosted by Trading View