Key Highlights
- Bitcoin price struggled this past week, and traded close to the $380-60 support area where it found buyers.
- There is a major support trend line formed on the daily chart with the data feed from HitBTC, which prevented a downside break
- Looking at the hourly chart, there is likely an inverse head and shoulders pattern forming that may ignite an upside move.
Bitcoin price is having a tough time, but there is a chance that it may bounce back in the near term as long as the $360 support area holds.
100-day MA as Resistance?
There was a downside reaction this past week for Bitcoin price, as it traded towards the $380 support area. There is a bullish trend line formed on the daily timeframe chart (data feed from HitBTC), which acted as a hurdle for sellers and managed to prevent any additional downsides. The highlighted trend line and support area may play a huge role for Bitcoin price in the short term. However, there are a few negative signs emerging as well. The most important one is the fact that the price is now below the 100-day simple moving average (daily chart via the data feed from HitBTC).
So, there is a chance that the 100-day simple moving average may act as a barrier for buyers if the price corrects higher during the upcoming week. We can safely say that on the downside, the highlighted trend line holds the key, and similarly on the upside, the 100-day simple moving average may play a major role. We need to keep an eye on both in order to get a feel for the next move. On the upside, a break above the 100-day simple moving average might take the price towards the 38.2% Fib retracement level of the last drop from the $470 high to $361 low. However, if there is a successful close above the 100-day MA, then it may be difficult for sellers to defend the upside move. In that situation, the price might head towards the 61.8% Fib retracement level of the last drop from the $470 high to $361 low.
If we look at the lower timeframe chart like the hourly chart via the data feed from Bitstamp, then there is a positive sign for buyers. There is an inverse head and shoulders pattern forming, which could ignite a rally in the near term. There is a bearish trend line formed, which can be seen as a neckline resistance area for the inverse head and shoulders pattern.
The price is currently trading near the 50% Fib retracement level of the last drop from the $396 high to $363 low, which is coinciding with the neckline resistance. A break above the same may call for an upside move that could take the price towards the 76.4% Fib retracement level of the last drop from the $396 high to $363 low. Buying with a break may be a good idea moving ahead.
Looking at the indicators:
Daily MACD – The daily MACD is about to change the slope to the bullish zone, which is a positive sign.
RSI (Relative Strength Index) – The daily RSI is below the 50 level, which may be a concern for bulls.
Intraday Support Level – $380
Intraday Resistance Level – $405
Charts from HitBTC and Bitstamp; hosted by Trading View
