On Nov. 30, the Bitcoin (BTC) price finally reached a new all-time high and proceeded to reach a high of $19,864. While the daily chart shows that the rally is overextended, the short-term one suggests that another increase is in store.
Yesterday, the BTC price reached a new all-time high of $19,864 and proceeded to close at $19,700.
This was especially significant as it occurred at the very end of the month.
Bullish Bitcoin Monthly Close
The monthly candlestick for November was a massive bullish engulfing candlestick which measured an increase of roughly $6,600. This is the highest dollar increase in a monthly candlestick in Bitcoin history.
The RSI has generated considerable bearish divergence, while the MACD has not. Due to the accelerated rate of increase, there is almost no support until $14,000.
BTC Price Shows Weakness
Despite the all-time high, it is worth mentioning that the breakout occurred with a relatively small volume, being dwarfed by that during the drop saw on Nov. 26.
Furthermore, both the RSI and MACD have generated considerable bearish divergences while the Stochastic oscillator has made a bearish cross, a sign that a trend reversal could occur.
The two-hour chart shows that the price has moved above the $19,300 area, which previously acted as a resistance. It is not yet certain if the breakout is a deviation above the range high or if it is a breakout and re-test of the breakout level.
Whether the price falls back below the area or bounces off of it will be a major determinant of the direction of the next move.
The RSI has generated a bearish divergence inside the overbought territory and has fallen below 70.
If a drop occurs, the closest support area would be found between $17,750-$18,154, the 0.5-0.618 Fib retracement levels of the most recent upward movement.
The alternative scenario would suggest that Bitcoin is trading inside a symmetrical triangle above the $19,300 area and will soon break out. A breakout that travels the entire height of the pattern would take BTC to $20,500.
Since triangles normally contain either B waves or wave 4’s, this would likely be a wave 4. After completing this wave, a decrease would normally follow.
To conclude, while the BC price has shown signs that it will retrace, the short-term movement suggests that another increase is in store, which could take the price towards $20,500.
Whether Bitcoin breaks down from or bounces at $19,300 will likely be crucial in determining its trajectory.
For BeInCrypto’s previous Bitcoin analysis, click here!
Disclaimer: Cryptocurrency trading carries a high level of risk and may not be suitable for all investors. The views expressed in this article do not reflect those of BeInCrypto
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