During the week of April 27-May 4, the Bitcoin price increased considerably and created a bullish engulfing candlestick. While the price began the week at $7,700, it reached a high of $9,640 before decreasing back below $9,000.
While the price reached a long-term resistance level, it was unsuccessful in breaking out above it.
Bitcoin’s Weekly Candlestick
Since reaching an all-time high price in December 2017, the Bitcoin price has been following a massive descending resistance line. The price has reached this resistance line for the fourth time last week. The two previous times of hitting this resistance were very close to the relative tops, and rapid downward moves followed shortly afterward.
However, last week’s candlestick was bullish, and transpired with higher volume than the preceding candlesticks, even if that volume pales in comparison to that in early March.
Bitcoin Daily Resistance
The daily chart reveals a very strong resistance level that is found at $9,200. This area has intermittently acted as both support and resistance, and its validity is increased since it is the 0.786 Fib level of the entire downward move.
Volume has been higher on bearish candlesticks, especially evident during the April 30 shooting star candlestick, which is normally a sign of a reversal.
Short-Term Descending Triangle
In the short-term, we can see that the price has been trading inside what looks like a descending triangle since April 30, when the price reached a high of $9,460. It is currently at its support line, which is found at $8,600.
Technical indicators paint a bearish picture. The hourly RSI has fallen below 50 for the first since the upward move began on April 23. In addition, the price has fallen below the 50-hour moving average (MA).
A bullish cross between the 50 and 200-hour MAs transpired on April 23, and the price had been trading above both of them since. However, it fell below the 50-hour MA yesterday and looks to be approaching the 200-hour MA at the time of press.
A price decrease below the latter would likely cause a breakdown from the triangle to $7,700, where the closest support area is located.
To conclude, the BTC price is trading inside a descending triangle, out of which a breakdown is expected. If this failure occurs, the price is likely to reach the closest support area found at $7,700.
For those interested in BeInCrypto’s previous Bitcoin analysis, click here.