After yesterdays pull back, Bitcoin is back in the green today but only slightly and a small volume. After directional moves, markets tend to trade in a range and it looks like price action in Bitcoin is setting up for a tight range over the next few days.

With the RSI currently in overbought territory, there seems to be a greater change of the next big movement being to the downside as opposed to the last range we traded in around $7400 where Bitcoin formed the bull flag pattern. Strong resistance is to be expected at $8650 mark with the price currently trading around $8250.

Even if the next significant movement is to the downside as long as we don’t drop below $7600, we will be pricing in a higher low which is a bullish signal and a sign of an uptrend. In the case that Bitcoin dropped below $8000, strong support is to be expected at $7850.

Bitcoin Daily Chart

The 4hr chart provides a closer look at what is happening with the price action at the moment. We can see yesterday’s pullbacks after price nearing recent highs of $8500, and we can see a move back upwards today but on low volume.

The MACD crossed it’s signal line to the downside today which is a bearish signal, but the price rose regardless. This is a strong testament to the mid-to-longer term outlooks for the price action in Bitcoin. When the price reacts strongly in the face of bearish signals and news, it demonstrates bullish momentum in the markets.

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Bitcoin 4hr Chart

The 1hr chart illustrates the range which is currently forming. The 50EMA has been acting as a support level, and in the event that this doesn’t hold, the 100EMA should act as further support.

Bitcoin 1hr Chart

Key Takeaways:

  • Mid-to-long term outlook is bullish. As long as price does not drop below $7600, a higher low will be formed, a bullish pattern and sign of an uptrend.
  • In the near to short-term, we could be due to a further pullback, but many support levels are in place which should act to hold the price.
  • Recent gain has been on low volume backing up a further pullback in price.
  • Strong resistance expected at $8650.
  • Market likely to trade in a range after its recent upward movement.
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