Bitcoin previously succumbed to bears and fell below $20,000 for a considerable period of time. At press time, however, the coin managed to break above the $20,000 mark. Market conditions are still fragile and BTC may once again fall below the $20,000 price level.
The volume of sales had increased, which had caused BTC to plunge on its chart in the past. As Bitcoin continued to oscillate between $22,000 and $19,000 last month, it is imperative that the coin manages to trade above the $22,000 mark for a considerable period of time for the bearish thesis is invalidated.
The accumulation was also weak for the king’s coin, as for most of this month Bitcoin traded in oversold regions. Long-term traders may not be on the winning side, but short-term traders can expect to make profits. It is, however, too early to tell if Bitcoin has exited the intense volatility phase. Price swings could once again push BTC below its current trading level.
Bitcoin Price Analysis: Four-Hour Chart
BTC was trading for $20,800 at the time of writing. The coin formed an ascending channel in which it traded. It is too early to tell if BTC has managed to describe a breakout. BTC price must break above $22,000 for this move to be considered a breakout.
Overhead resistance was at $21,000 and then $22,000, respectively. A drop from the current trading level will take BTC to the $19,000 area and then to $17,000. The amount of BTC traded has dropped significantly, indicating that the selling pressure has diminished on the four-hour chart.
Technical analysis
BTC was moving higher in an ascending channel and the coin increased buying pressure at press time. The Relative Strength Index represented a rally as the indicator pushed higher above the half line indicating declining selling strength.
With continued buying momentum, BTC may invalidate 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 considered extremely bullish for Bitcoin.
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Consistent with other indicators, BTC presented a similar reading on the Moving Average Convergence Divergence. MACD determines price momentum and where the coin is heading it has undergone a bullish crossover.
Due to the bullish crossover, the indicator was showing green signal bars which was a buy signal for Bitcoin. Buyers acted accordingly, which is why the coin showed increased buying strength. The Parabolic SAR represents price direction and the dotted lines below the candlestick indicate a positive price direction.
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Featured image from UnSplash, chart from TradingView.com