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.
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