Technical analysis 16.9: Bitcoin price is testing an important support level

bitcoin-analysis

We have seen a small move down in the past few weeks and the price has tested an important support level.

On the weekly chart we see that this down move from $12.5k top is testing the important long term support/resistance level (now support since it’s below the price) at $10k-10.5k. It is important that this level holds and we won’t witness daily or weekly closes below this level. Blue solid moving average from 100 days is just below the price as well.

If this support level breaks, it opens the door for a test of the 2020 open at $7160. Long term range in this case is about $10k-7k. Would be better for the bull trend to stay above this range.

Good news is that there is no reason to assume that this support level is going to break. Price is already going up as I am writing this and this move can very well be going up until it breaks the $12.5k top. Breaking the 12,5k could accelerate the rise and lead bitcoin to much higher prices.

Since we have been consolidating here above $10k some time now, I do not believe that the 2018 open at $13880 will be resist the rise strongly anymore. It seems like once the recent $12.5k top breaks there won’t be a lot of resistance before the ATH (all time high) price level at $17k-20k.

From this long term daily chart you can see how during the bull run from $200 to $20k daily RSI going below 30 was showing good spots to buy especially when it coincides with price hitting a support level.

From this long term weekly chart you can see that weekly RSI going below 50 while breaking important support levels could be a sign that the bull run is not yet ready to start, but we need more long term consolidation to shake out even more weak hands.

So to conclude this analysis, in my opinion this is or was most likely a normal correction in a bull trend that is just starting. This may be a good buying opportunity. But it is always good to think about the less likely bearish scenarios as well.

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