Market Overview: Bitcoin
Bitcoin’s weekly chart hints at a potential resumption of the bullish trend, a critical question emerges: What hurdles must the bulls overcome to maintain their momentum? Conversely, how can the bears seize control and reverse the tide?
Our analysis delves into these questions, examining the intricate dance between buyers and sellers. On the daily chart, we uncover a trading range that could be brewing a bullish pattern at its upper boundary. Will this pattern propel Bitcoin to new heights, or will bears thwart the breakout attempt?
Join us as we dissect the charts, identify key levels, and explore potential scenarios that could shape Bitcoin’s price action in the coming weeks.
Bitcoin
The Weekly chart of Bitcoin
After testing the prior all-time high, Bitcoin failed to consolidate above it, resulting in a two-legged sideways to downward movement that found support at the 20-week EMA.
Bulls who entered the market at the 20-week EMA or above the bull reversal bar that surged from it, are now in a favorable position, potentially poised for a continuation of the uptrend. However, the previous stall at a major resistance level has injected a degree of hesitation into the bullish camp. Ideal bull trends typically break through resistance levels rather than faltering, leaving some uncertainty about the market’s next move.
This week’s candlestick is currently resembling a bullish bar with a prominent tail extending above the body. This marks the first time there are consecutive bull bars since the pullback began, suggesting a possible resurgence of buying pressure. If the upcoming week delivers a robust bullish bar, bulls may consider trailing their stop losses higher, from the current major higher low of $38,500 towards the current bull flag low of $56,500.
On the other hand, bears have been unable to exert significant downward pressure since the buy climax, struggling to form decisive bearish bars with follow-through. Their best hope for the coming weeks may be to maintain the current limit order market behavior, characterized by sideways price action. Each additional sideways bar would help to balance the odds, which currently favor the bulls following the surge up from the 20-week EMA.
The Daily chart of Bitcoin
In the previous report, we continued to discuss the trading range. The market did a strong bull breakout bar that emerged early this week. Given its position within the top third of the trading range, this breakout was sold.
Bears who sold into the bull breakout bar, potentially utilized stop losses based on measured move targets derived from the breakout bar or the triangle’s/head and shoulders bottom size, or other kind. These targets might be situated above $75,000, Some bears may have already taken profits around the breakout bar’s low. Others may anticipate a more extended bearish leg down and hold their positions until the price revisits the trading range’s apex.
Despite the current price residing in the top third of the trading range, bulls may be on the lookout for a bullish setup, particularly due to the weekly chart’s potential resumption of the major bull trend. Additionally, the previously identified triangle might represent an accumulation pattern, a Triangle, or Head and Shoulders Bottom, it does not matter how we call it.
Some bullish speculation suggests a larger Cup and Handle pattern could be in play. Ideally, this would culminate in a Breakout Mode Pattern near the top third of the pattern, presenting a buying opportunity if a bullish breakout from this pattern occurs.
However, this scenario remains speculative. Bears are likely to attempt selling at a second entry point or above prior highs, such as the April 8th high or the current all-time high. The market’s direction will depend on the balance of power between bulls and bears in the coming days.
We encourage you to share your thoughts and insights in the comment section below. Engage in discussions with fellow traders, exchange ideas, and collaborate on analyzing the evolving Bitcoin landscape. We wish you a successful and profitable week ahead!
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