In our previous video - A happy new year (2023) with this Bitcoin analysis from ForexLive.com - when BTC was at $16700, I called Bitcoin's upcoming rise and now we are over 27% above that in less than 2 weeks, a staggering rise.
Now BTC is dancing around $21,000 and I lay out a triple resistance area, close to $23k (see video for more specifics, and you are also welcome to draw the lines and patterns shown on your chart).
Technical analysis of Bitcoin (BTC) might be complicated, but there are various signs and tools you can use to make better judgments. BTC/USD chart analysis shows the following:
Trend analysis: Use moving averages and trendlines to determine market direction.
Believe it or not, Bitcoin is still trending up on the monthly time frame, as the purple trend line within the analysis video above shows. However, BTC has recently crossed down and needs to recapture the trend line. The expectation is that it will first backtest that line, as shown in the video.
Support and resistance levels: Find levels where the price has previously found support or resistance to detect probable price reversals
The purple, long term trend line is a resistance and the video shows that there are 2 others in the $23k area. If BTCUSD clears $25k, it would have, naturally, reclaimed the trend line mentioned above and $25212, the high of August 2022, will be waiting to be taken for the bulls to open up to the next rally. On the support side, $20k ‘round number’ should be protected. No 2 consecutive daily candles should close below it, otherwise, bears regain control.
Chart patterns: Watch the yellow channel shown in the video above, it should be crossed up to reach the ‘magnet’ tripple resistance area of $23k. If price later re-enters that channel, it would be a bearish sign. From 5th of Nov till 16th of Jan 2023, we have got a potential ‘cup’ of a ‘Cup and Handle’ pattern, which is worth keeping an eye on, should the handle later be printed.
Indicators: RSI, MACD on the daily timeframe are currently confirming the ongoing rally. However, this is delayed data and delayed indicators that do not help us a lot now in forecasting the next move in the price of Bitcoin. Watch the technical analysis video above to see a better expectation (IMHO).
Volume analysis: 4 out the last 5 days have seen healthy volume, supporting the bullish drive. All volumes are above the 20 moving average. Looking forward, an additional and unusual volume spikes, should it happen, may indicate a buying exhaustion and upcoming trend shift (from bullish to bearish)
The Bitcoin technical analysis video above (a recommended watch for any serious crypto follower!) uses several time periods to determine the long-term trend and short-term trade chances. Specifically, watch the monthly, weekly and daily timeframes on the BTCUSD video analysis (at the top of this page) demonstrated.
Visit ForexLive.com technical analysis for additional perspectives and trade Bitcoin or any other crypto asset at your own risk only.