As Bitcoin price finished the week with a strong move to the upside, we take a look at what this means for the Bulls and Bears heading into the week.
Weekly Chart
Bitcoin price closed the week at $3,650 (+6.9%) after finding support at the 200 week moving average, which propped the price up above $3,300.
The candle formation on the close was bullish engulfing and a tweezer bottom, which demonstrates a strong rejection by the bulls after the bulls found support late on Friday.
Despite the strength in the move blasting through the $3,550 resistance, Bitcoin price was unable to press on towards the ultimate target to make a higher high above $4,000. The bulls will be looking to find their legs on any retracement following the inevitable profit taking after an 11% move on Friday.
Daily Chart
Looking closer at the daily position, Bitcoin price action last week was ultimately capped buy a combination of the declining diagonal resistance and the horizontal resistance meeting at $3,700.
This is now a critical level to overcome in order for BTC to avoid being trapped inside another bearish triangle, which would take the cryptocurrency below $3,000 and most likely extend the bear market for a number of months.
The bulls, therefore, likely need to put in a higher low, somewhere between the 78.6% and 50% retracement $3,400 and $3,500, which will need to be met with bullish volume to take bitcoin price out of the Bearish triangle and avoid a retest of the low $3,000s.
4 Hour Chart
Taking a closer look at the 4-hour chart, it appear that BTC is already up against it on Monday morning following a rejected attempt by the bulls to finish close to $3,700 on Sunday evening.
With the chart beginning to look all too familiar as a so called ‘Bart’ pattern, implying downside risk.
The Mac-d shows that momentum is bearish, but is still above zero. We can also see a gap in volume on the VPVR, which would imply that a fast more could occur down to $3,400 should $3,500 fail to hold up.
On a more bullish note, if the current price action can resolve bullish on Monday and Tuesday, with a close above previous highs, there is little resistance between $3,760 and $3,950, which would be a very positive move for the bulls.
Trade Bitcoin, Litecoin and other cryptocurrencies on online Bitcoin forex broker platform evolve.markets.
To get receive updates for the writer you can follow on Twitter (@filbfilb) and TradingView.
Images courtesy of Tradingview.com, Shutterstock
