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.
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.
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.
- 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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