- Uptrend may have just been saved
- Resistance above observed
- Bitcoin has been acting like gold
The bitcoin bounce over the weekend was welcome news for traders, as we have seen a trend line break recently. Unfortunately, we still have the 50 day EMA just above, which could cause some issues, so we need to pay attention to that. All things being equal, it’s very likely that we will make a serious attempt at breaking above that level, as we are starting to reach towards major support levels.
The $9250 level has offered major support a couple of times in the recent past, and the fact that we have bounced from there over the weekend is a good sign. Although we had broken below the uptrend line that you see on the chart, the reality is that there was massive support just underneath there as well. This means the trend line break by itself wasn’t necessarily a reason to start selling. Even with that, it is not a good look.
If you reach back a few days into our analysis, you will see that we noted the $9250 level as crucial. The fact that we have held above there is the first hurdle cleared by the bullish traders to save the overall uptrend. This uptrend has been very reliable until the last couple of months where we have been digesting. Those gains are going to be crucial, but at this point I think it’s only a matter of time before we have to make some type of longer-term decision.
There is resistance above
There is resistance above in the form of the 50 day EMA, which is currently trading at roughly $10,100. Beyond that, there’s also the previous uptrend line, which could offer selling pressure. Ultimately, if we can break above both of those small hurdles, we can start looking towards the $12,000 level again. With the economic outlook as it stands, it does make some sense.
Global financial situation
Bitcoin has been acting a lot like gold lately, as people ran from various fiat currencies around the world with a slowing global situation, and the central banks were doing everything they could to bring down rates. As such, it is very likely that this market will continue to grind higher. Once we get above those resistance barriers mentioned earlier, we could notice an upsurge at that point.
The other argument of note is that, in the event of some good news – perhaps due to a more hawkish Federal Reserve than anticipated – that could send this market down to the 200 day EMA, which is currently hanging about the $8000 level right now. Regardless, we have a small $750 range or so that we are looking at as a deciding region to pay attention to. It is only a matter of time before we break out, and when we do, we could have a significant move.
- Bitcoin finding horizontal support
- Friday showing signs of life
- Cryptocurrency on the precipice
Bitcoin has bounced during the trading session on Friday as we continue to see a lot of support just below. The $9250 level is massive support, as indicated on the chart, since the support line that has been so strong over the last several months has held. It will be interesting to see what happens next, as we are at the point of wondering whether or not we are going to continue to see a bullish trend.
Technical factors come into play when it comes to the Bitcoin market. At this point, it’s very likely that we are going to see signs of support in this general vicinity based upon the $9250 level, which offered so much support over the last several months. However, there are other things to pay attention to on the chart that aren’t necessarily positive.
The first thing is the fact that we had broken down below the trend line. That is a very negative sign, but you can also make an argument for not only the horizontal support, but also the 200 day EMA. At this point, if we break down below the $9250 level, it opens up a move lower, down to the $8000 level, as the 200 day EMA is right around that level. To the upside, the red 50 day EMA will also offer resistance right along with the previous uptrend line.
All that being said, even though the technical analysis is all over the place, the reality is that the level we are at has offered plenty of support in the past. So, until it gets broken, one should assume that we are going to see support, especially considering that we have bounced a bit over the last couple of days every time we got close to it.
The fundamental case
The fundamental case for Bitcoin rallying makes sense considering that the world is running away from trouble and fiat currencies. Central banks around the world continue to loosen monetary policy, so at this point it’s foreseeable that Bitcoin will continue to find plenty of buyers. It’s probably only a matter time before the market turns around, reaching towards the 50 day EMA and eventually the $12,000 level, which is the top of the range.
At this point, there is a lot of choppiness. That’s not a huge surprise considering that we are at the end of the summer, which typically shows little in the way of volume. However, in the next week or so, we will start to see more money run into this market and go looking to the upside.
I believe that Bitcoin will continue to find buyers at this point in time. We would have no interest in shorting, although I do recognize that a break down below the $9250 level on a daily chart gives a short-term selling opportunity. At the same time, the 200 day EMA may be even more supportive.