Bitcoin Price Outlook: BTC/USD Chart Highlights a Potential Reversal
BTC/USD Price Technical Outlook
- Bulls ease up and yet still in charge
- The key chart points and signals to monitor
BTC/USD – Bullish Momentum Stalls
On Thursday, Bitcoin printed its highest level in a near two months at $9.463 then retreated after, as some bulls seemed to ease up. Yet, on the following day the weekly candlestick closed in the green with a 16% gain.
Alongside that, the Relative Strength Index (RSI) remained flat above 70 reflecting a paused bullish momentum.
Bitcoin PRICE DAILY CHART (Jan 15, 2019 – May 4, 2020) Zoomed Out
Bitcoin PRICE DAILY CHART (March 12 – May 4, 2020) Zoomed In
Looking at the daily chart, I noticed that on April 22 the price closed above the 50-day moving average and generated a bullish signal. Last week, BTC/USD climbed and remained in the current trading zone $7.824 -$9.080 highlighting the lack of impulse to continue bullish price action.
Yesterday, Bitcoin failed to push to the higher zone and this may reverse the market’s direction towards the low end of the aforementioned trading zone. A further close below this level could send BTC/USD even lower towards $6.540. That being said, the weekly support level underlined on the chart (zoomed in) should be monitored.
On the flip side, a close above the high end of the zone signals a stronger bullish momentum and this may trigger a rally towards $10.507. A further close above that level could extend this rally towards $12.320. In that scenario, the weekly resistance area and levels marked on the chart should be watched along the way.
Bitcoin PRICE FOUR Hour CHART (April 8 – May 4, 2020)
Looking at the four-hour chart, I notice that on April 16 the price broke above the downtrend move originated from the April 7 high at $7.455 and started a bullish momentum creating higher highs with higher lows. Later on, Bitcoin developed a double top pattern hinting to a possible price reversal. Therefore, any violation of the neckline located at $8.414 would be considered a bearish signal.
A break below $8.366 would be considered another bearish signal and could send BTC/USD towards $7.871. Although, the daily support level underscored on the chart should be monitored closely. In turn, any break in the other direction i.e. above $9.218 may cause a rally towards $9.479. Nevertheless, the daily resistance level printed on the chart should be kept in focus.
See the chart to know more about the critical levels in a further bearish/ bullish move.
Written By: Mahmoud Alkudsi, Market Analyst
Please feel free to contact me on Twitter: @Malkudsi
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.