Technical Analysis and Market Entry: BTC/USD Undergoes A Small Retreat with Big Upside Still Eyed
- Bitcoin bulls enjoyed its most consecutive run seen since July, gaining some 23% between 3 – 8 January.
- BTC/USD price action is moving within a bullish flag structure via the weekly chart view.
BTC/USD: Recent Price Behaviour
The Bitcoin price over the recent days had a decent surge in upside momentum, running up to its highest levels seen in three weeks. It managed to break back within the psychological $8000 price territory, after smashing through a chunky barrier at $7600. BTC/USD saw a wave of pressure to the north, given this resistance that had been containing the price. It had been forced to trade within a narrowing range, following the steep fall in November.
Market bulls enjoyed a five consecutive day run, the best seen since July. The gain over the noted period was some 23%, before running into another strong aware of resistance. At the time of writing, Bitcoin’s break above $8000 has proven to be short-lived. The price is heading back towards a critical restest of the breached $7600 barrier, likely new support.
Double Bottom Breakout
Bitcoin price action via the daily chart view had formed a double bottom technical pattern. The first low produced on 25 November, with the price wicking into a big cushion at $6500. The second low seen on 18 December, also touching that $6500 area. In terms of the neckline of this formation, that was noted at $7600. The earlier detailed surge of bullish momentum came upon the neckline breach, inviting further buying participation. However, as noted, the bulls have hit a stumbling block, forcing some near-term selling.
BTC/USD via the weekly chart view has been moving within a bullish flag structure. The formation of this commencing in the latter stages of June, following the first half of 2019 bull run. The pole of the flag it the noted run higher than the bulls had enjoyed, after bottoming out in January 2019. In terms of the most recent price rejection, as detailed above, it was upon touching the upper descending trend line of the flag.
Given the recent price run higher, there are promising signs of further upside pressure to come. BTC/USD had jumped somewhat aggressively within a short space of time; technically, a slight retracement may have been needed. A buy position could prove to be opportunistic upon a retest of the noted double bottom neckline, $7600. Entry at this level, with targets to the upside at; $8500, $10,000 and then $11.000. Stops to be placed below at $7000.
Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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