Bitcoin analysis – These indicators point to a course correction
5 min readAs a result of the positive court ruling for Ripple, the Bitcoin price was able to rise to a new annual high of USD 31,862 in an initial reaction, but there was again a lack of sustainable price momentum. A false breakout on the upside resulted in the price slipping back to the psychological 30,000 USD level last Friday, July 14th. The fact that the trading volume on the spot market is still unable to recover and continues to decline has recently acted as an additional headwind. The Bollinger Bands on the daily chart have continued to narrow over the past few days. A price breakout should ensure a trading range expansion. It is striking that the current sideways phase bears a clear resemblance to the Wyckoff distribution scheme having. Another indication of an imminent course correction. If the Bitcoin price gives up the trading range of the previous weeks at the daily closing price and then falls below the red support zone in the area of the EMA50 (orange), there is a threat of a southward extension of the correction. This thesis is supported by a bearish divergence in the RSI. Despite new highs for Bitcoin, this recently formed lower highs and underpins a falling trend strength.
Bitcoin: Bullish price targets for the coming trading weeks
Bullish price targets: 30,385 USD/30,615 USD, 31.050/31.443 USD, 31,755 USD, 32.403/32.938 USD 34,748/34,934 USD, 35,561 USD, 36,587/37,452 USD
In the previous week, the buyer side again missed the chance of a sustained bullish price breakout from the sideways range. The resistance at 31,755 US dollars could not be broken through sustainably. The subsequent sell-off pushed the BTC price back to the lower edge of the trend channel, just below 30,000 USD. Bitcoin now needs to stabilize above 29,500 USD to stave off a correction extension. The bulls must be there at the latest at 29,185 USD. Only a sustained recapture of the yellow zone between 30,385 and 30,615 USD would calm the buyer camp. If the price recovers back above this area, the lower edge of the green resistance zone at 31,050 USD will come into focus again.
If this price level is breached, Bitcoin should target the 31,443 USD mark. However, as long as this price level is not broken by the daily closing price, the probability of a sustained trend continuation is still limited. If the Bitcoin price can then dynamically break out of the previous high for the year, a continuation of the trend up to the resistance bulwark between 32,403 and 32,938 USD is conceivable. This is where an overriding directional decision is made.
Only if the buyers manage to overcome this strong resist zone in the future, despite increased profit-taking, would the way be clear for a follow-up movement to the next relevant target area of horizontal resistance and 161 Fibonacci extension of the current movement between 34,748 and 34,934 USD. In the long term, Bitcoin could then even advance to the brown resistance zone between 36,587 and 37,452 USD.
Bitcoin: Bearish Bitcoin price targets for the coming trading weeks
Bearish price targets: 29,994 USD/29,847 USD 29,422 USD, 29,185 USD, 28,467 USD, 28,063 USD 27,506 USD/27,166 USD 26.809 USD/26.657 26,311 USD/26,074 USD, 25,351USD/24,749 USD.
The sell-side used the abstinence of the buy-side at the price breakout last week for a counter-attack and pushed Bitcoin back to the lower edge of the sideways range. Thus, the bear camp was able to record its first point victory. The aim of the bears must now be to push Bitcoin sustainably below 29,847 US dollars in the direction of the last historical low.
The price consolidation should then expand in the direction of the first target zone between USD 29,422 and USD 29,185. Should Bitcoin subsequently also give up the pink support area, the chart picture would cloud over further. With a sustained abandonment of the EMA50 (orange), the correction extension increases noticeably up to the high of May 29 at 28,473 US dollars. The supertrend in the daily chart is currently not far below this support level. A directional decision can be expected at the latest at 28,063 US dollars. Here, the bulls should provide a backlash.
However, if the weakness persists, the consolidation will extend towards the orange support zone between $27,506 and $27,166. This area acted as resistance several times in the previous months. In addition, the golden pocket of the last price movement runs in this zone. A technical counter-reaction is to be classified as probable.
If, contrary to expectations, the Bitcoin price continues to show weakness, the BTC price could be passed through to the old breakout zone around 26,657 US dollars. With the EMA200 (blue) there is also strong technical support. The maximum price target for the coming weeks remains the purple support area between 26,311 US dollars and 26,074 US dollars A fall back towards the last historical low between 25,351 USD and 24,748 USD is conceivable. Here the buyer side is likely to speculate on a double floor and come back onto the floor.
Looking at the indicators
The RSI as well as the MACD are increasingly trending south in the daily chart. The aforementioned bearish divergence unfolded its power in the RSI in the last few days and pushed it back into the neutral zone. However, there are still chances of stabilization. Only a drop below 45 would generate a fresh sell signal. The MACD has already generated a weak sell signal, but is still trading above its 0 line. A dip back into negative territory would further reinforce the short signal.
The price weakness of the last few days has also left its first mark on a weekly basis. The RSI indicator is currently trending slightly south, but is still trading in bullish territory with a value of 60. The same applies to the MACD, which also continues to have an active long signal.
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