Bitcoin Very Likely Broken Long Downtrend, But Overheated — Price Analysis

By January 29, 2020 Bitcoin Business
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Bitcoin (BTC) has done it, or at least it is very likely: with the decisive snapping of the critical $9,100 resistance zone last night, the leading crypto has climbed over the final hurdle needed to declare an end to the H2 2019 downtrend. Now, all it has to do is hold on to this taken ground for a while and consolidate there.

simple
BTC chart by TradingView

Things look excellent in both the medium and high timeframes, although on lower timeframes the run is looking a little extended. Pulling back and retesting/consolidating around $9,100 would be the healthiest move from here.

We turn to the 4-hour chart to get a detailed look at the indicators, and note first of all that volume has been ebbing a bit on Bitstamp – although this trend is not mirrored on Coinbase and some other exchanges.

Will we get consolidation?
BTC chart by TradingView

Perhaps surprisingly, we see no bear divergence on the 4-hour RSI, although we do on lower timeframes; and we do see a bear divergence on the histogram here. Overall, Bitcoin looks powerful in its medium-term uptrend, and already looks to be forming another bull flag. $9,188 is the top of the January 19 surge, and a likely place for buyers to start buying if price gets that low.

On the daily chart, we principally see that price has flipped the entire previous resistance zone surrounding $9.1k, derived from multiple inflection zones during 2019. The RSI here has also not formed a bearish divergence on the recent uptrend, and the histogram is at present pointing straight up – indeed a bullish picture altogether.

strong uptrend on MTF
BTC chart by TradingView

Volume is again the issue, as it has not generally kept up with rising prices. Perhaps this will change if trend reversal is further confirmed.

Finally, we look on the weekly chart for some context, and note that a new resistance zone is now in Bitcoin’s sights. This is the resistance line drawn all the way from the 2017 top, starting from the weekly candle bodies (black line). It is an accomplishment in itself just to be re-engaged with this resistance zone.

A new nemesis
BTC chart by TradingView

The indicators here also look excellent, with RSI almost flat-headed through what is the historical bull inflection zone: if it can get above this, it will be another confirmation of a full-blown bull market. The histogram, very notably, has crossed over into the positive side on strength; and if this profile holds for a few more days, it will be extremely bullish.

The likelihood that Bitcoin has entered a truly bullish HTF uptrend is high, and it’s as simple as that. Things could, of course, still reverse, but the likelihood of that is ever-dwindling. The downtrend has been smashed – now it just has to stay that way.

The views and opinions expressed here do not reflect those of CryptoGlobe.com and do not constitute financial advice. Always do your own research.

Featured Image Credit: Photo via Pixabay.com

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