Disclaimer: The findings of the following article are the sole opinion of the writer and should not be considered investment advice
Bitcoin, at the time of writing, was trading towards the lower side of $18,000. While after yesterday’s drop down to $17,640 BTC was quick to rebound above $18,000, it struggled to keep its position above the resistance level at $18,400. With the cryptocurrency’s price a little more volatile than last week, its short-term chart pointed to another possible recovery on the charts in the next few days.
Bitcoin 1-hour chart
The 1-hour chart for Bitcoin pointed to the formation of a descending broadening channel. The crypto-asset previously failed to break above the trend line and dropped below $18,400. At the time of writing, however, even though the price continued to hold a position below the resistance level, the nature of the pattern implied a bullish return.
The price may have failed to breach the pattern due to the presence of the 50-Moving Average which was acting like an overhead resistance. At the moment, the price breakout may follow either the blue or yellow line of movement. A positive case that can be made is the decreasing trading volume alongside the price, a finding that suggests that any radical reversal would also lead to a price spike.
While bullish momentum remained absent on the charts, other market indicators underlined the chances of a potential price surge. The Awesome Oscillator or AO indicated that momentum was absent with both the bulls and the bears, at press time. The Stochastic RSI was extremely bullish, with its bullish indicators completing a positive reversal in an oversold region.
Finally, the On-balance volume has continued to remain at a lower range since the last week of November. A price spike over the next few days would see it rise on the charts too.
Resistance: $18,404 $19,054
Support: $17,640 $17,520
Long Position Entry: $18,000
Take Profit: $18,800
Stop Loss: $17650
Market indicators were clearly implying a rise which might just come into the picture before the end of the week. While the cryptocurrency’s price may not clear the resistance level at $19,054, a recovery above $18,400 seemed feasible, at press time.