Bitcoin goes from one formation to another – This is what we can read in the charts

As we announced last week, volatility has emerged on Bitcoin’s chart. Last Thursday initiated a move that, within 24 hours, drove the price up nearly 9.6%. Shortly after, BTC re-entered a consolidation, but there are many indications that it will not last long.

Bitcoin on a weekly basis

Again, the zoomed-out perspective helps us not lose sight of aspects at lower intervals. It thus presents us with some interesting information. First of all, the past week resulted in the successful defense of the long-term downward trend line. The MACD indicator is still unchanged, thus maintaining a bullish momentum. It lacks momentum of course. However, the clearly positive MACD itself is still a good sign. Noteworthy is the presence of 9 red candles of the TD Sequential indicator. It usually suggests the vicinity of the turning point, for the movement in force.

Thus, the above indicators say that the probability of Bitcoin price increases is emerging. 

In addition, it is worth noting that last week represented the fifth consecutive closing of the price below the 2017 peak. Counting from June this occurred for the seventh time. On the other hand, looking at the RSI, we will note that it has already passed the 92nd week that Bitcoin is below the index’s downward trend line.

Bitcoin on the daily chart

On the other hand, on the daily chart we once again note the long-term downtrend line, which was broken out and not accompanied by positive volume. This caused a change in the structure of the chart. Nevertheless the previous trend line was replaced by a new one (marked with dotted lines) which is clearly respected so far. It is supported at the bottom by a support line (also dotted) which in combination form a descending triangle. As we know, this is clearly a bearish formation. Accumulation inside the triangle is confirmed by the volume, which is steadily decreasing. However, the clear, yet strong purchases of BTC at low price levels inside the formation suggest that the decline will not happen. As with the previous long-term formation, a sideways price exit, or even an upward breakout, seems highly likely. In the meantime, the indicators do not indicate any anomalies.

The dollar on the bearish side

The data on the weekly chart thus seems to favor the bulls. The formation on the daily chart, on the other hand, points to the bears, but leaves some doubts about its validity. We can be helped by the dollar index, which as we know, is inversely correlated with the price of Bitcoin.

Here, however, good news is hard to come by, the DXY is holding the uptrend line, from the vicinity of which it has just managed to bounce. MACD is clearly changing momentum to bullish. Meanwhile, the RSI defends the 50 level, which is a very important support in the context of further increases.

We can see that the DXY is clearly siding with the bears. This has been the situation since February. Since then, until June, Bitcoin was clearly falling. However, in the following months, despite the DXY’s increases, we witnessed consolidation on the BTC chart. It is possible that despite signs suggesting volatility, it is the sideways movement that is more likely to continue.

Picture of Łukasz

Łukasz

Market Analyst

Disclaimer: Blockbulletin does not take accountability of investments based on the information of the website. We highly advice readers to make extensive research prior to any invest

Share this article

More analyses

All articles loaded
No more articles to load

More news

XRP

XRP outperforms Bitcoin and Ethereum

In the past week, XRP decisively outperformed its main rivals, Bitcoin (BTC) and Ethereum (ETH), in terms of capital flows. Moreover, it recorded an impressive $2.7 million…

Solana and Avalanche on the eye of investment funds

Two alternative coins, Solana (SOL) and Avalanche (AVAX), are gaining increasing interest and are successively attracting the attention of investment funds. Although bitcoin (BTC) remains the main…
All articles loaded
No more articles to load

Learn more

Cryptocurrency wallets

Cryptocurrency wallets

We talked about security when trading crypto assets in an article titled “Online security“. We also mentioned how important it…
hardware wallets

Cryptocurrency hardware wallets

From the article titled “Cryptocurrency wallets” you learned about the different types of wallets. They were briefly characterized there. Let’s…
Where to buy cryptocurrency brokers

Which cryptocurrency Brokers to use

In the article “Where to Buy Cryptocurrencies (Exchanges)“, we introduced you to which exchange platforms you can purchase cryptocurrencies on.…
Trading cryptocurrencies

Trading cryptocurrency

In the cryptocurrency market, you face many opportunities to invest in cryptocurrency or buy or sell cryptocurrency. If you want…
All articles loaded
No more articles to load

Latest news

All articles loaded
No more articles to load