- Bitcoin has rebounded from fresh yearly lows at $3,215 into combined resistance at the $3,701 handle.
- The market is still in uncertain conditions as the daily RSI rests at the 50 handle.
- Support moving forward: $3,544, $3,482, $3,420, $3,405, $3,333, $3,280, $3,228, $3,083, $3,000, $2,885, $2,482, $2,356.
- Resistance moving forward: $3,701, $3,851, $3,885, $3,959, $4,001, $4,067, $4,298, $4,576, $4,931, $5,360.
Latest Bitcoin News
Last week, we had suggested that Bitcoin may have been at a turning point within the market.
After our analysis, BTC/USD fell further lower to create fresh 2018 price lows at around $3,215. However, after placing these lows the market rebounded and began to rise.
Bitcoin has seen a small surge over the past few days which has resulted in the cryptocurrency climbing back up into resistance around the $3,700 handle.
Over the past few days, there has been little major news about Bitcoin.
One positive development is the appointment of a new Chief of Staff in the White House, Mick Mulvaney. This is extremely relevant to Bitcoin supporters as Mulvaney is a known advocate for Bitcoin and blockchain.
In other news, Tom Lee, head of research at Fundstrat Global Advisors, has come forward and said that Bitcoin is severely undervalued at $3,300. In fact, he goes as far as saying that the fair value price is around the $14,800 handle.
Let us take a look at Bitcoin price action over the past couple of weeks and any potential support and resistance areas moving forward.
Bitcoin Price Analysis
Bitcoin has seen a 8% price increase over the past 24 hours of trading, bringing the current trading price to around $3,601, at the time of writing.
This now brings the 7-day price increase to a small 1.56% climb after the cryptocurrency suffers a precipitous rolling 30-day price decline which now totals to 36.29%.
The number one ranked cryptocurrency currently holds a market cap value of around $61.6 billion. It now trades at a value that is 81% lower than the all-time high price.
Analyzing price action from the 4-hour chart above, we can see that since our last analysis, Bitcoin price action had fallen further into support provided by a short-term downside 1.618 FIbonacci Extension level (drawn in blue) priced at $3,228.30.
As BTC/USD approached this area, price action rebounded and began to rise. The market then went on to surge until meeting resistance at the $3,700 handle.
The combined level of resistance was provided by the previous long-term downside 1.414 FIbonacci Extension level (drawn in purple) priced at $3,701 and a bearish .382 FIbonacci Retracement level (drawn in red) priced exactly at the same price point
Price action for BTC/USD has stalled slightly and pulled back from the $3,700 area to where it is currently trading around $3,600.
Trend: Bullish Above $3,701
If the buyers can continue to climb higher within the market and break above the combined resistance at the $3,701 handle, we can expect the market to continue on its reversal path and continue to rebound.
For the market to be considered bearish, price action would now need to dip lower and break the recently establish 2018 price low around $3,125.
Where is the Resistance If BTC Breaks Above the $3,701 Handle?
From a short-term perspective, if the buyers can eventually manage to push price action above the resistance at $3,701 we can expect immediate resistance above to be located at the previous bearish .5 Fibonacci Retracement level (drawn in red) priced at $3,851, closely followed by a short-term 1.272 Fibonacci Extension level (drawn in green) priced at $3,885.
If the bulls continue to climb higher, we can expect more resistance above to be located at the short-term 1.414 Fibonacci Extension level (drawn in green) priced at $3,959, followed by the bearish .618 Fibonacci Retracement level (drawn in red) priced at $4,001.
If the bulls continue to pressure price action to break above $4,000, then more resistance toward the upside from a short-term perspective can be expected at the short-term 1.618 Fibonacci Extension level (drawn in green) priced at $4,067.
Where is the Support Located If BTC Retraces Below $3,600?
If the market continues to pull back and breaks below the current price at $3,600, we can expect immediate support below to be located at the short-term .382 and .5 Fibonacci Retracement levels (drawn in orange), priced at $3,544 and $3,482 respectively.
Further support beneath these levels can then be located at the short-term bearish .618 Fibonacci Retracement level (drawn in orange) priced at $3,420, followed by the previous long-term downside 1.618 Fibonacci Extension level (drawn in purple) priced at $3,405.
If the selling pressure causes BTC/USD to break further below $3,400, we can expect more support beneath to be located at the .786 and .886 Fibonacci Retracement levels (drawn in orange), priced at $3,333 and $3,280respectively.
This is closely followed by the previous short-term downside 1.618 FIbonacci Extension level (drawn in blue) priced at $3,228.
What Are the Technical Indicators Showing?
On the 4-hour basis, the RSI was in overbought conditions but has recently fallen slightly lower.
If the RSI remains above the 50 level, the short-term bullish run is still on.
However, on the daily time frame, the RSI is trading directly on the 50 handle which is a suggestion that the previous bearish pressure has completely faded.
The market now awaits the next big push to decide in which direction price action will head toward next.
The break of BTC/USD back into the $3,700 handle will bring some joy to cryptocurrency investors as the market has continued to make lower lows over the past few weeks.
However, the long-term bearish outlook is still in play and can only change if the market can break above a price around the $4,500 handle.