Bitcoin Analysis: Cautious Optimism Above $57,000

Bitcoin is at an important moment. The price seems to be forming a bearish pattern, but there is a chance that the price will not ultimately break out to the downside. Many analysts remain optimistic and expect the price to rise this week and reach above $60,000 again. While this may be too ambitious, it is important to recover some of the recent correction in the coming days, and that seems achievable.

The 4-hour chart: Will we stay above $57,000?

As long as Bitcoin remains above $57,000, there is reason for optimism, albeit cautiously. Holding 57k means that we have regained a small support level. The last two red 4-hour candles are then intended to retest the support and attract buyers, before the price can rise further.

However, we should pay attention to the lack of buying volume, which is usually not positive. In the above chart, we see a decreasing buying volume while the price still made higher highs and higher lows. Although this does not always say much on a relatively short-term chart of 4-hour candles, it is important to know that a coming increase from this level must be supported by high volume. This confirms the trend.

If we do not see this, and we continue to see a decrease in volume (see black arrow), then the increase is not a healthy movement and you can expect a trend change. Volume is therefore very important to keep an eye on.

The weekly chart: are we going above the indicator again?

Let’s be honest: the weekly chart doesn’t look good. Not only has the price made a lower low, which indicates a trend break, we have also lost an essential indicator. This indicator always acts as a major support or strong resistance. Often there is little gray area in between. Losing this band, therefore, almost always means that it now turns into a stubborn resistance.

There are now two possible scenarios. In the first scenario, the price rises above the Bull Market Support Band, the indicator I just talked about, this week or next week. This would mean that the recent drop below the band could be considered a fake-out.

In the second, bearish scenario, which may be more plausible in the current circumstances, we have definitively lost the band as support and can expect more bearish price action.

Both scenarios are realistic. By paying particular attention to volume, support levels and weekly closes, we can figure out in the short term what to expect from Bitcoin in the coming months.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button