It’s been an eventful week for all financial markets–especially in the cryptocurrency markets. Since cryptocurrency is more volatile and easily influenced than traditional markets, it’s important to do an honest evaluation frequently and assess the situation. Doing so can improve your performance as an investor and also just make you a much more knowledgeable investor.
This comprehensive look at Bitcoin’s price action, trend, and underlying analytics will give us some insight into what we can expect from Bitcoin’s price in the coming days, weeks, and months. With this knowledge, we’ll be able to judge what would be a proper entry, exit, or any other change in position.
For this analysis, we’ll look at Bitcoin’s price chart on the 1-hour, 4-hour, and 1-day timeframes to determine what we think the direction of Bitcoin will be for the three timeframes. We’ll use indicators like RSI and trendlines to ensure that what we are seeing is confirmed by technical analysis.
For the short-term analysis of Bitcoin, we are going to look at a chart that is using 1-hour candles. That means that for each candle on this chart, 1 hour of time has elapsed. Here’s what we’re currently looking at:
Though the past few weeks of being invested in Bitcoin have been volatile, what we’re seeing on the short-term chart is a lot of chop and sideways action. However, even this chart has some things to say. As you can see, we’re at a critical price level that has been touched multiple times as both support and resistance.
If the price can sustain a breakout over the white support line and continue its double bottom pattern (highlighted in yellow), we have every reason to believe that Bitcoin’s price will rise in the coming hours.
To look at Bitcoin on the medium time frame, we are going to pull up a chart that has 4-hour candles. This means that each candlestick on the chart represents 4 hours of time. This analysis will give us an idea of what is going to occur in the coming days and what price targets we should be keeping an eye on as the price action unfolds.
As you can see on our 4-hour chart, we are looking at the same general supports that were used for the 1-hour chart. We also clearly have a double-bottom structure still forming on this timeframe, which is highlighted in yellow.
One notable difference on this chart is that we definitely have a price target that we are aiming for. The gray box highlights another key support/resistance that we anticipate Bitcoin is headed to. This, combined with the general uptrend over the past month or so, forms a bullish ascending triangle that is very encouraging.
The only worrying sign to arise from this chart is that the RSI seems to be quite high, so this could take a couple of days to come to fruition while the RSI cools down a bit.
For the long-term view of Bitcoin, we are going to look at a chart with 1-day candles. For each candle on the chart, 1 day of time has elapsed.
The yellow line on this chart represents a very solid support that we might expect Bitcoin’s price to retreat to if it is unable to break out above the white line, which is the current resistance. If Bitcoin is able to sustain a breakout above the white line, we expect the price to continue its uptrend and make investors happy in the coming months.