Bitcoin Struggles Within A Range, When To Expect A Breakout?


Bitcoin had previously succumbed to the bears and sank below $20,000 for an extended period of time. But at the time of publication, the coin has managed to rise above the $20,000 mark. Market conditions are still fragile and BTC could fall back below the $20,000 price level.

The selling volume increased causing BTC to drop on the chart in the past. As Bitcoin has been fluctuating between $22,000 and $19,000 for the past month, it is imperative that the coin can trade above the $22,000 mark for an extended period of time until the bearish thesis is invalidated.

Accumulation has also been low relative to the King coin, as for most of this month, bitcoin has been trading in oversold territory. Long-term traders may not be on the winning side, but short-term traders can expect to make some profits. However, it is too early to say whether Bitcoin has ever exited a phase of extreme volatility. Fluctuations in the price could push BTC back below the current trading level.

Bitcoin Price Analysis: Four Hour Chart

Bitcoin
Bitcoin is priced at $20,800 on the 4-hour chart | source: BTCUSD on TradingView

BTC is trading for $20,800 at the time of writing. The currency has formed an ascending channel through which it is traded. It is too early to say whether BTC succeeded in filming the hack. BTC price must rise above $22,000 for this move to be considered a breakout.

The upper resistance stood at $21,000 and $22,000, respectively. A drop from the current trading level will take BTC back to the $19,000 area and then back to $17,000. The amount of BTC circulating has decreased significantly, indicating that selling pressure has decreased on the four-hour chart.

Technical Analysis

Bitcoin
Bitcoin showed increasing buying power on the 4-hour chart | source: BTCUSD on TradingView

BTC was moving up in an ascending channel and the coin flashed increasing buying pressure at press time. The RSI depicted a recovery as the indicator pushed itself up above the half line indicating declining selling power.

With the buying momentum continuing, BTC could negate its bearish momentum. The price of the asset was above the 20-SMA indicating that the buyers were driving the price momentum. BTC was also above the 50-SMA and the 200-SMA which is very bullish for bitcoin.

Related reading | A break above this level could help Polkadot recover on the chart

Bitcoin
Bitcoin depicted a buy signal on the 4-hour chart | source: BTCUSD on TradingView

According to other indicators, BTC gave a similar reading on the Moving Average Convergence Divergence. The MACD determines the price momentum and where the currency is headed, it has undergone a bullish crossover.

Due to the bullish crossover, the indicator displayed green signal bars which was a buy signal for bitcoin. Buyers acted on it, which is why the coin showed an increase in buying power. The Parabolic SAR depicts the price direction and the dotted lines below the candlestick point towards the positive price direction.

Related reading | TA: Bitcoin Price May Rise to $22,000, Why BTC Remains Supported

Featured image from UnSplash, chart from TradingView.com



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